Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

EPSOM AND WALTON DOWNS REGULATION BILL [Lords]

NOTTINGHAMSHIRE COUNTY COUNCIL BILL [Lords]

Orders for Second Reading read.

To be read a Second time upon Thursday.

Oral Answers to Questions — ENERGY

Wages Costs (Coal Industry)

Mr. Welsh: asked the Secretary of State for Energy what was the change in real wages costs per tonne in the United Kingdom coal industry in 1981–82.

The Under-Secretary of State for Energy (Mr. John Moore): Industrial wage costs per tonne fell in real terms by 2·6 per cent. in the year 1981–82 compared to 1980–81. This fall was due to higher productivity. Wage levels were maintained in real terms.

Mr. Welsh: I thank the Minister for that reply, but does he agree, on this special occasion, that other costs must be

taken into account, such as those of disasters in mines, like the Coventry accident this weekend, which was a terrible cost? Will the Minister, because of those circumstances, convey our deep thanks to all who took part in the rescue so speedily and so well, and convey to the injured and their loved ones our best wishes for a speedy recovery?

Mr. Moore: I am sure that on this occasion the hon. Member, with his long experience of the mining industry, expresses the mood and sentiment of both sides of the House. I visited the colliery on Saturday afternoon and the men in hospital. I am happy to report that at that time, and since, the men were well on the way to recovery. When I last heard, seven men were in hospital. I shall convey to the industry and to those involved in the excellent and courageous rescue operation the good wishes and the sentiments of the House.

Mr. Rost: Will my hon. Friend confirm that although productivity has shown a welcome marginal increase, the deficits of the National Coal Board look as if they will be above its estimates for the current year? How will those deficits be financed unless there is a speed up of closures of uneconomic pits?

Mr. Moore: Despite the present difficulties in the market, it is difficult to judge the current deficit. We hope that the National Coal Board will stay, as it wishes to, within its current EFL.

Mr. Rowlands: As one who represents a mining community, I share the sentiments of anguish and grief expressed by hon. Members on both sides of the House about the colliery disaster.
With regard to the main question, does the hon. Gentleman understand the deep sense of frustration that is felt in many parts of our coalfields, particularly in the Welsh coalfield, about the cutbacks in capital investment which will endanger the development of that coalfield? For example, is he aware that the cutback in capital expenditure in the Welsh coalfield has been 40 per cent. or more in real terms? Will the Minister re-examine these figures, because that is the basis for the frustration and anger recently expressed in that coalfield?

Mr. Moore: As the hon. Member knows full well, the investment in the coal industry that is approved by the Government goes to the coal industry as a whole. As he also knows, the decisions on where to put that investment must be a matter for the board, and both Conservative and Labour Parties, when in Government, have given the coal industry since "Plan for Coal" £4½ billion in investment, £1½ billion in excess of that anticipated in "Plan for Coal".

Nuclear Materials (South American Exports)

Mr. Dalyell: asked the Secretary of State for Energy whether any nuclear materials have been exported from the United Kingdom to South America over the past year.

Mr. John Moore: The export of plutonium, uranium, thorium and their compounds is controlled through licences issued by the Department of Trade. Exports were made in the past 12 months under such licences to Brazil, Guyana, Peru, Uruguay and Venezuela. All exports were in such small quantities of materials that they could not be used to make a nuclear weapon. Where necessary, the materials are safeguarded under agreements with the International Atomic Energy Agency.

Mr. Dalyell: Is the Minister aware that there are almost certainly six plutonium bombs in Campo de Mayo? Although almost certainly the result of the Falklands war has been to expedite the Argentine nuclear capacity, based on ex-Nazi scientists, none the less, if we are exporting very little, what about the French? What help is France giving—

Mr. Speaker: Order. The hon. Gentleman knows that he must question the Minister about the things for which he is responsible. He is not responsible for the French Government.

Mr. Dalyell: In that case, are we certain that exports to Peru do not find their way across the Andes to Argentina?

Mr. Moore: All the exports from the United Kingdom this year and in previous years have been of quantities insufficient to make a nuclear weapon. All exports of nuclear materials are covered by safeguard agreements and bilateral notes, effective through countries where there are intermediaries, such as the Federal Republic of Germany.

Heat Conservation (Publicity)

Mr. Colvin: asked the Secretary of State for Energy if he is satisfied with the publicity available setting out the most up-to-date recommendations for the conservation of heat.

The Under-Secretary of State for Energy (Mr. David Mellor): Yes.

Mr. Colvin: I thank my hon. Friend for that comprehensive reply. Is he aware that many local authorities are underspent on capital account and that the current estimate for this financial year is about £1,000 million? Does he not consider that public capital invested in thermal insulation of both domestic and other buildings would give the nation an immediate return in terms of the energy saved? What is his Department doing to persuade local authorities to improve their performance in this respect?

Mr. Mellor: That is a matter primarily for the Department of the Environment. But my hon. Friend

raises an important topic, and I am happy to tell him that a good number of the additional capital investment allocations already made to local authorities have included provision for precisely this sort of investment. About £1·2 million has been made available for additional grants under the homes insulation scheme over and above the level previously announced.

Mr. Palmer: Does the hon. Gentleman not agree that the Select Committee on Energy recently produced a comprehensive report on the conservation of energy in buildings? When can we expect the Government's observations and some action on it?

Mr. Mellor: The Chairman of the Select Committee was notified by the Department that we hoped to have our response available by Christmas. The response is already far advanced and I hope that we shall be able to keep to that deadline.

Mr. Penhaligon: What methods have the Government at their disposal for making a judgment about the average level of conservation in domestic properties? How does the hon. Gentleman reckon that it has changed in the last two or three years?

Mr. Mellor: We know the overall consumption level for energy. Often it is a matter of a guestimate to know how to attribute that. But there has been a decline of between 6 and 7 per cent. in recent years as a result of insulation and other measures taken in the home. I am happy to tell the hon. Gentleman that the figure in 1981 for, say, the number of lofts insulated showed a welcome increase on the year before. In 1981 some 800,000 householders either put in insulation for the first time or added to inadequate insulation already there.

North Sea Oil Fields (Taxable Capacity)

Mr. Michael Morris: asked the Secretary of State for Energy when he last met representatives of the oil industry to discuss the taxable capacity of future North Sea oil fields.

The Minister of State, Department of Energy (Mr. Hamish Gray): My right hon. Friend the Secretary of State and I last met representatives of the United Kingdom Offshore Operators Association on 2 December.

Mr. Morris: Is my right hon. Friend aware that it is now the unanimous view of the oil companies and those who comment on and are knowledgeable about on the oil scene that the time has come for a change in the taxation of marginal fields especially, otherwise their development will be restricted? If there are to be changes, is it not appropriate that they should last at least five years, so that there can be planned development of those important assets?

Mr. Gray: I recognise that many future fields are likely to be smaller and may be more marginal than earlier fields. I am anxious to reach a better understanding with the industry on assessment of the taxable capacity of these fields. For that reason, consultations have been taking place with the oil industry. My right hon. and learned Friend the Chancellor of the Exchequer will have to make his own assessment on these matters, of course, but my hon. Friend may be assured that the position is being looked at constantly by the Government.

Dr. J. Dickson Mabon: In the assessment of these matters, is it the Government's intention that net self-sufficiency in oil will be continued into the 1990s? Does that not mean that about 30 marginal fields will be required to be considered under very special taxation arrangements if they are to be brought into production?

Mr. Gray: Given the right hon. Gentleman's experience of Department of Energy matters, he will appreciate that it is not only taxation that influences decisions by the companies to proceed. I am happy to tell the House that today plans have been approved by Britoil for the Clyde field, which can now go ahead. This is a £1 billion project. The right hon. Gentleman will also be aware that the Government have pursued a vigorous policy of licensing to create maximum exploration so that discoveries may be made and the position that he desires may be achieved.

Mr. Douglas: Does the right hon. Gentleman accept that while taxation remission for the marginal fields is interesting, there is another way to go? It is to keep down production costs, especially of the facilities which are put over the fields. What assistance is the Department giving to British enterprises to ensure that when and if new production techniques are evolved Britain is in the forefront?

Mr. Gray: My Department is doing all that it can through the Offshore Supplies Office to give maximum encouragement to British companies in their efforts to obtain orders from the United Kingdom continental shelf. However, it would be a mistake for British industries to think that all their orders can be supplied from the continental shelf. With that in mind, we are doing all that we can to encourage our companies to bid for overseas work, especially on the Norwegian continental shelf.

Mr. John Smith: Is the Minister aware that the frequent changes in taxation policy since the present Government came to office have made the taxation of oil companies scarcely intelligible and very capricious in its effect? Will the right hon. Gentleman undertake to simplify the structure and see whether he cannot create an incentive for further exploration, which, after all, is what we want to achieve in the North Sea?

Mr. Gray: I do not think that the right hon. Gentleman and I differ about our ultimate objectives for encouraging investment in the North Sea. My right hon. and learned Friend the Chancellor of the Exchequer will be considering carefully the best taxation policy to follow. However, I should remind the right hon. Gentleman that, until the end of November this year, no fewer than 102 exploration and appraisal wells had been drilled. This is second only to the record year of 1975, when 116 were drilled.

Mr. John Smith: Under a Labour Government.

Mr. Gray: Yes. That was when the right hon. Gentleman was Minister of State. But I hope very much that, weather permitting, we shall be able to beat that record this year.

Oil Reserves

Mr. Chapman: asked the Secretary of State for Energy by what amounts his predictions of United Kingdom total recoverable oil reserves have varied in the last five years; and what is the latest figure.

Mr. Gray: The estimated range of recoverable oil reserves has varied from between 3,000 million and 4,500 million tonnes in 1977 to between 2,100 million and 4,300 million tonnes in 1982. At 1 January 1982 the estimated total remaining recoverable reserves were between 1,750 million tonnes and 3,950 million tonnes.

Mr. Chapman: As that answer presumably confirms that we are using up our oil supplies at a greater rate than we are discovering new recoverable reserves, will my right hon. Friend confirm that it essential that the utmost encouragement should be offered companies to drill in new fields? In the light of my right hon. Friend's replies to supplementary questions just now, will he confirm that the incentives are greater today than they were, say, four or five years ago?

Mr. Gray: There is little doubt that the incentives to explore for gas are greater today than they were four or five years ago. As a result of the Oil and Gas (Enterprise) Act, companies are now being encouraged to explore for gas in a way that was not previously possible. I remind my hon. Friend, in addition, that the seventh and eigth rounds, especially the eighth, will offer considerable acreage to this end.

Energy-intensive Industries

Mr. Skeet: asked the Secretary of State for Energy if he will take further action to assist the energy-intensive industries.

Mr. Proctor: asked the Secretary of State for Energy what recent assessment he has made of energy price trends within the Organisation for Economic Co-operation and Development countries; and if he will make a statement.

Mr. Hannam: asked the Secretary of State for Energy how electricity prices paid by British industry compare with those paid by industry in other European Economic Community countries.

Mr. Beaumont-Dark: asked the Secretary of State for Energy when he last met representatives of the Confederation of British Industry to discuss industrial energy prices.

The Secretary of State for Energy (Mr. Nigel Lawson): Industrial energy prices were discussed at the NEDC last Wednesday. Generally speaking, they are broadly in line with those in other European countries. Industry will get further substantial help from next year's standstill in electricity prices, worth a total of £500 million to consumers as a whole, and also from the extension of the freeze on industrial gas prices.

Mr. Skeet: As the intensive electricity users in Europe, in appropriate circumstances, will secure discounts ranging between 15 per cent. in France and 50 per cent. in Italy, compared with negligible figures in the United Kingdom, is my right hon. Friend not being misled by his Department? Will he consider one of the appropriate answers, and that is to enable the CEGB to sell direct to the energy-intensive industries in the United Kingdom?

Mr. Lawson: The problem of electricity prices is directly related, as my hon. Friend well knows, to the costs of generating electricity, and they are not significantly affected by whether the consumer goes to the area board or direct to the CEGB, which in this country is not the


normal approach. My hon. Friend knows, too, that the cost of coal is critical in this regard. However, the difference between what the average industrial consumer pays and what is paid by the heavy energy intensive high-load factor customer on CCL—contracted consumers load; the arrangement was brought in with the agreement of my right hon. and learned Friend the Chancellor of the Exchequer in the last Budget—is about 40 per cent. The man on that scheme pays up to 40 per cent. less per unit of electricity than the average industrial electricity consumer. Incidentally, I belatedly take this opportunity to welcome the right hon. Member for Lanarkshire, North (Mr. Smith) to the Opposition Front Bench on energy matters.

Mr. Proctor: I thank my right hon. Friend for the assistance given to heavy energy-intensive users of energy so far, but will he accept that industry itself is always nervous about accepting estimates and figures that come from his Department? Will he consider having a regular, authoratitive, agreed and unclassified statement on energy disparities with other European countries similar to that achieved through the NEDC?

Mr. Lawson: I do not accept that what my hon. Friend says about the nature of figures emanating from my Department is warranted. We participated fully in the NEDC task force, and at present we are well content to allow the CBI and the trade associations affected, together with the electricity supply industry and the gas corporation, assisted by our good offices, to reach agreed figures on this matter. I hope that we shall get the figures sorted out quickly. In fact, we are very near to that, and I do not believe that there is any major difference between the CBI and my Department and the Government on the figures.

Mr. Hannam: Does my right hon. Friend accept that heavy energy users in industry face not only higher energy prices than their continental rivals, but 20 per cent. higher costs for their heavy fuel oil? Notwithstanding the concessions given during the past year and the freeze on prices, does he accept that this small but important sector of heavy energy users in industry needs further help, and will he do all that he can to assist in the forthcoming Budget?

Mr. Lawson: I am sure that my right hon. and learned Friend the Chancellor of the Exchequer, who is an assiduous reader of Hansard, will note my hon. Friend's last remark. However, it is equally important to get the matter into perspective. Although there are certain disparities, they apply to a very small number of consumers. The disparity probably affects those with a load factor of over 80 per cent.—certainly over 70 per cent.—and even those with a load factor of over 70 per cent. are only 15 per cent. of industry as a whole. As I said, that represents only a part of the industries concerned.

Mr. Skeet: If only a small number of firms are affected, the problem is easy to cure.

Mr. Lawson: I am sorry. I should have said that it is 5 per cent. of industry using 15 per cent. of industry's electricity. If the tariff were tilted in such a way that other consumers paid more to help those consumers, that would cause equal dismay in other quarters.

Mr. Beaumont-Dark: Does my right hon. Friend agree that there is considerable force in the CBI's argument that industry is being asked to bear the cost of many of the surrenders that have taken place year after year to the National Union of Mineworkers? Does he also agree that every time an uneconomic pit is kept open, which means that coal costs more, it means that jobs can be lost in private industry?

Mr. Lawson: I entirely agree with my hon. Friend about the importance of keeping down coal costs. I hope that all right hon. and hon. Members will do all that they can to assist and support the Coal Board in its current drive to make the industry more efficient and cut the cost of coal.

Several hon. Members: rose—

Mr. Speaker: Order. I now propose to call several hon. Members from the Opposition side of the House.

Mr. Hardy: Does the Secretary of State accept that industries such as the special steels industry of South Yorkshire have been badly hit and appear to face competition which enjoys favourable energy prices? That is because Governments in competing countries intervene and give subsidies which in some respects appear to be in breach of Community rules and appear to have gone unremarked upon? Does the Secretary of State accept that, even in countries where energy prices may be lower than they are in this country, the input price of energy and raw materials appears to be a great deal higher than here, and that Sir Terence Beckett and his friends have had little to say about that?

Mr. Lawson: Again, it is important to get the matter into perspective. The steel industry throughout the world is facing serious and difficult problems. To speak as though the problems were peculiar to the steel industry in this country or the one about which the hon. Gentleman is rightly concerned bears no relation to the truth. About 6 per cent. of steel costs, both direct and indirect, are accounted for by electricity. The Japanese, who are the toughest competitors in steel, pay more for electricity than do steel makers in this country.

Mr. Stoddart: Is the right hon. Gentleman aware that the coal industry in this country contributes greatly to keeping costs down? Surely the right hon. Gentleman is also aware that coal prices on the Continent are subsidised to a high degree, sometimes by as much as between £18 and £30 a tonne.

Mr. Speaker: Order. We must have a question, not an argument.

Mr. Lawson: I am aware of the coal industry's contribution and I am also aware of how much greater a contribution it could make.

Mr. Palmer: On electricity, could not the right hon. Gentleman use the Energy Bill, which is now going through the House, to remove the non-discrimination clauses on electricity tariffs for industrial users?

Mr. Lawson: It is a nice question whether in the long run industry would benefit from the removal of the non-discrimination clauses. The hon. Gentleman should consider the case of gas, where there is no similar non-discrimination, no undue preference statute. Under the Labour Government the price of gas to industry was forced


up and the price of gas to the home was kept down. I therefore very much doubt whether the practical facts of politics are such that industry would benefit from the removal of the undue discrimination clause.

Mr. Hal Miller: Will my right hon. Friend pause to recollect that energy-intensive industries are concerned not only with gas and electricity? Will he say anything about the future of the foundry coking coal subsidy, and whether those prices are still to be related to the oil coefficient thermal value?

Mr. Lawson: The last matter is a trifle too technical for me, but I am sure that my hon. Friend the Under-Secretary, who knows all about these things, will be only too happy to write a letter, expressed in simple terms, which I might be able to understand. The future of the renewal of the foundry coke subsidy is under consideration.

Nuclear Power Generating Stations

Dr. J. Dickson Mabon: asked the Secretary of State for Energy how many privately owned nuclear powered generating stations are in operation in the United Kingdom; and what recent requests he has received from individuals or private companies to build such nuclear powered generating stations.

Mr. Mellor: None.

Dr. Mabon: Why are we persisting with the provision in the Energy Bill that allows private companies to be main generators of nuclear power? If the Minister does not sympathise with that, why does he not scrap it?

Mr. Mellor: If I may say so, the right hon. Gentleman is being a little perverse. It has been made clear that the Government are erecting a further barrier that would lie in the way of a private generator who wished to build a nuclear power station. As the right hon. Gentleman was happy that a private generator did not require the Secretary of State's consent when he was in the Department of Energy, I cannot understand his concern now.

Standing Charges

Mr. Moate: asked the Secretary of State for Energy what representations have been made to him concerning the levels of standing charges charged by the electricity and gas industries.

Mr. Greenway: asked the Secretary of State for Energy what response he has had to his proposal that standing charges should represent no more than half the total sum charged to the domestic consumer by electricity and gas boards.

Mr. Aitken: asked the Secretary of State for Energy if he will publish the independent reviews of domestic gas and electricity standing charges.

Mr. Teddy Taylor: asked the Secretary of State for Energy what response he has received from the gas and electricity industries to his proposals on standing charges.

Mr. Warren: asked the Secretary of State for Energy whether the electricity and gas industries have yet responded to his request that they should limit standing charges for small consumers of energy.

Mr. Nelson: asked the Secretary of State for Energy whether any progress has been made in revising the structure of standing charges for small consumers of gas and electricity.

Mr. Lawson: The nationalised gas and electricity industries are still considering my proposal that standing charges should represent no more than 50 per cent. of a domestic consumer's bill. Representations from individual members of the public are overwhelmingly in favour of the proposal. Meanwhile, the independent review of their standing charges commissioned by the industries is making good progress and I would expect the results to be published in the new year.

Several Hon. Members: rose—

Mr. Speaker: Order. As the six hon. Members who tabled the questions that are being answered together are all Government Members, I propose to vary my usual custom and call an hon. Member from each side of the House in turn. Therefore, some hon. Members may have to wait.

Mr. Moate: My right hon. Friend's answer confirms that there is extensive and widespread support for his efforts, but does he accept that there is an impression that the industries are dragging their feet? Is he getting proper co-operation, or is he being thwarted in his efforts?

Mr. Lawson: There are some people in the industries who are not fully aware that this is a matter of elementary commercial common sense. There is a small but highly aggrieved sector of the population who feel strongly on this matter and the scheme would alleviate their anxiety. Over one-third of the letters that my Department receives on standing charges are on that relatively narrow point. However, the industries do have a fair point when they say that they would like to see the results of the independent reviews that I have mentioned before they come to a conclusion.

Mr. Rowlands: Does that answer mean that we are not to have the 50 per cent. concession before the completion of the review for which the Minister promised to press the industries last week during questions on energy? Is he aware of the typical case of a constituent of mine, Mrs. Rees in Merthyr—[Interruption] who received a gas bill for £10, of which £9 was the standing charge? When does the right hon. Gentleman expect to have an answer to the 50 per cent. proposal that he has put forward? Will it be before Christmas or after?

Mr. Lawson: The moving example that the hon. Gentleman has just adduced will assist in the process that I am seeking to push along.

Mr. Greenway: When, finally, we hope, the industries agree to my right hon. Friend's excellent suggestion, will he endeavour to have it implemented from now? In particular, will he do all that he can to ensure that old-age pensioners eventually get full relief front standing charges?

Mr. Lawson: My hon. Friend will be aware that the industries are responsible for their tariffs and I have no power to direct them. I have called upon them to make a modest change in their tariffs and I hope that in due time they will do so. To give all pensioners full relief would be a costly exercise and I do not think that the extra cost that would result to other consumers could be justified.

Mr. John Smith: The Secretary of State complains that he has no power to direct the industries. He will be aware that there is an Energy Bill before the House at the moment. Why does he not table an amendment to give himself such powers?

Mr. Lawson: The Energy Bill relates to the electricity supply industry, whereas this matter relates to electricity and gas.

Mr. Aitken: rose—

Mr. Speaker: I shall call the hon. Gentleman after I have called other hon. Members whose questions are being answered.

Mr. Warren: While I welcome my right hon. Friend's initiative, may I ask him to put strong pressure on the boards to respond, as discussions on standing charges have been going on for at least two years now? Will his Department try to agree, particularly with the gas and electricity boards, the nature of the standing charge calculation, on which there appear to be substantial errors at present?

Mr. Lawson: I hope that the independent reviews that have been put in train by the industries at my request will settle the problem once and for all and that there will be no more errors, as my hon. Friend calls them. He is right to say that the standing charges have been a matter of concern for two years, if not longer, but the 50–50 proposal—if I may call it that—was put forward as recently as October this year.

Mr. Penhaligon: If the Minister's proposals were implemented, what percentage of the customers of the electricity and gas boards would be helped for at least one-quarter of the year?

Mr. Lawson: About 1 million electricity consumers and about 1 million gas consumers would be assisted by the proposals.

Mr. Aitken: In view of the widespread concern among small consumers, particularly the elderly, will my right hon. Friend give some idea of how he attempts to define a "small consumer"?

Mr. Lawson: Yes. The category can be simply defined by quoting people such as Mrs. Rees—I am not sure whether she is any relation of the right hon. Member for Leeds, South (Mr. Rees)—whose quarterly standing charge is greater than the charge for the units consumed.

North Sea Gas Supplies

Mr. Douglas: asked the Secretary of State for Energy if he will make a statement on the level of gas supplies from the southern sector of the North Sea in the current year.

Mr. Gray: Total gas production from the southern basin of the United Kingdom continental shelf in the first nine months of this year was approximately 19·5 billion cubic metres.

Mr. Douglas: Will the Minister concede that in due time we shall have to import gas to offset the decline in the United Kingdom gas industry? What arrangements are being made with the Norwegians to use the United Kingdom as a land bridge, both to import, and probably to export, Norwegian gas in order to balance and reduce the dependence of Western Europe on Soviet gas?

Mr. Gray: The hon. Gentleman will be aware that at present Britain imports approximately 20 per cent. of our gas requirement from Norway. It has already been suggested to the Norwegians that the United Kingdom might be used as a land bridge but so far they have not shown much enthusiasm for the proposal. However, the Government are endeavouring to ensure that there will be adequate supplies of gas by enacting the Oil and Gas (Enterprise) Act, which now makes it much more attractive for companies to explore for gas. With regard to the southern basin, no fewer than 38 gas blocks are on offer in the eighth licensing round.

Mr. Eggar: Can my right hon. Friend confirm that British Gas is now predicting a serious shortfall in gas supplies in the late 1980s? Is that not directly due to the failure of British Gas over the years to give a decent price to southern producers?

Mr. Gray: British Gas is making every effort to obtain gas purchases so that such a deficit will not be reached. It is best to leave pricing to British Gas. It is not something on which we can intervene.

Mr. Eggar: No.

Wind Power

Mr. Tony Speller: asked the Secretary of State for Energy what potential there is for the development of wind power as a renewable source of energy.

Mr. Mellor: The potential of wind energy is high. My Department is funding further research and development, including the construction of a large wind generator on Orkney.

Mr. Speller: I thank my hon. Friend for that reply. If he revisits North Devon, may I suggest that he and his officers visit the Isle of Lundy, where, in the past month, an aerogenerator has been installed which creates enough power for the entire local load, with surplus capacity for the future? Does he agree that we should be planning both offshore and onshore aerogenerators in places where the wind blows regularly?

Mr. Mellor: I am familiar with the 55kW aerogenerator on Lundy. I hope that it will be a success and that as a result of experiments throughout the country we shall be able to embark on a wider scale exploitation of wind power.

Combined Heat and Power Schemes

Mr. Rost: asked the Secretary of State for Energy what steps he is taking to encourage the growth of industrial combined heat and power schemes.

Mr. Mellor: The Energy Bill will positively encourage such schemes. It will remove legislative constraints and establish for the first time a statutory framework for fair dealings between the operators of these schemes and the public electricity supply industry.

Mr. Rost: Will my hon. Friend confirm that much of industry is rightly complaining about uncompetitive energy prices and is now regarding the Energy Bill as a means of providing an alternative opportunity for producing their own heat and power more economically than by using existing nationalised industries? Will my


hon. Friend give more publicity to the opportunities that the Energy Bill will provide for fair competition in the private sector?

Mr. Mellor: The Bill was embarked upon after careful consultation with various industries and their representatives. We have every reason to believe that there is a demand for the new regime created by the Bill and we shall give it all the publicity that we can.

Mr. Hooley: Since the Secretary of State has taken an unusually intelligent decision not to proceed with the fast breeder reactor, is it not possible to divert funds from wasteful expenditure on nuclear methods to increased public support for combined heat and power?

Mr. Mellor: I do not know where the hon. Gentleman gets his information from, but what he said about the Government's statement on fast breeder policy is an absolute travesty. The merits of CHP are clear and established and are not advanced by people using them as a stalking horse for anti-nuclear sentiment.

Energy Consumption

Mr. Hardy: asked the Secretary of State for Energy what is his estimate of the total amount of energy consumed in the United Kingdom in the first six months of 1982, expressed in terms of tonnes of coal or coal equivalent; and how this compares with consumption in each of the three previous years.

Mr. John Moore: United Kingdom energy consumption at 163 million tonnes of coal or coal equivalent in the first six months of 1982 was 0·7 per cent., 7·2 per cent. and 14·5 per cent. lower than in the corresponding periods of 1981, 1980, and 1979 respectively. I shall arrange for details to be published in the Official Report.

Mr. Hardy: Does not that answer illustrate the serious nature of the problem that affects our energy industry? Is it not clear that the amputation of demand in Britain has created more problems than it has solved?

Mr. Moore: The answer illustrates in part the impact and depth of the recession. The hon. Gentleman will be particularly interested, in view of his attitude to conservation, that it shows clearly that energy consumption per unit of industrial output fell by 10 per cent. in that period. All concerned with energy efficency will welcome that.

Mr. Eggar: Does not the fall in energy consumption reinforce the need to ensure that the National Coal Board produces coal at competitive prices and continues in its determination to close uneconomic pits?

Mr. Moore: It clearly shows, as has been said from both sides of the House many times, that if we are to achieve more markets for coal or any other fuel we have to be concerned about price competitiveness and security of supply. A key ingredient—[Interruption.] The right hon. Member for Lanarkshire, North (Mr. Smith) keeps interrupting from a sedentary position. I repeat to him that capital investment has been £4½ billion since "Plan for Coal". That is £1½ billion in excess of that anticipated for the period.

The following are the details:



Total primary energy consumption



January to June each year



1979
1980
1981
1982


Million tonnes of coal or coal equivalent
190·6
175·7
164·2
163·0


Index numbers, January to June 1982 = 100
117
108
101
100

Table 1


Total consumption by fuel, 1979 to 1982 (January to June) Primary fuels for energy use*



January to June each year



1979
1980
1981
1982


Million tonnes of coal or coal equivalent


of which:


Coal
67·8
64·9
60·2
58·2


Petroleum
74·3
63·7
56·1
57·9


Natural gas
40·3
39·3
39·5
38·4


Nuclear electricity
7·1
6·9
7·2
7·3


Hydro electricity
1·1
0·9
1·2
1·2


Total
190·6
175·7
164·2
163·0


Percentage shares (fuel equivalent basis)


of which:


Coal
35·6
36·9
36·7
35·7


Petroleum
39·0
36·3
34·2
35·5


Natural gas
21·1
22·4
24·0
23·6


Nuclear electricity
3·7
3·9
4·4
4·5


Hydro electricity
0·6
0·5
0·7
0·7


Total
100·0
100·0
100·0
100·0


Source: Energy Trends.


* Including non-energy use of natural gas.

Table 2


Index numbers of consumption by fuel, 1979 to 1982 (January to June) Primary fuels for energy use*


January to June 1982 = 100



January to June each year



1979
1980
1981
1982


Coal
116
112
103
100


Petroleum
128
110
97
100


Natural Gas
105
102
103
100


Nuclear electricity
97
95
99
100


Hydro electricity
87
72
95
100


Total
117
108
101
100


Source: Energy Trends.


* Including non-energy use of natural gas.

Table 3


Final consumption by user, 1979 to 1982 (January to June) Thousand million therms (Heat supplied basis)



January to June each year



1979
*1980
1981
1982


Iron and steel industry
2·6
1·4
1·6
1·7


Other industries
9·7
8·9
7·5
7·7


Transport sector
6·8
6·9
6·6
6·8


Domestic sector
9·6
8·8
8·6
8·6


Other final users
4·7
4·1
4·1
4·1


Total
33·4
30·1
28·4
28·9


Source: Energy Trends.


* Figures for the iron and steel industry were to some extent affected by the strike early in 1980.

Alternative Energy Sources

Mr. Knox: asked the Secretary of State for Energy whether he proposes to have discussions within the European Economic Community Council of Ministers about alternative sources of energy.

Mr. Mellor: Yes, Sir.

Mr. Knox: Does my hon. Friend agree that this sphere of research should be undertaken on a Community basis rather than on the basis of the present mixture of national and Community research?

Mr. Mellor: I cannot agree with my hon. Friend. The interests of Community members in relation to renewables are different. When one looks in detail at the matters that are subject to Community programmes one realises that some renewables—geothermals for example—are of greater importance to Britain and are not as fully covered by the Community as Britain's interests demand.

National Coal Board

Mr. Dormand: asked the Secretary of State for Energy when he next proposes to meet the chairman of the National Coal Board to discuss productivity in the industry.

Mr. Canavan: asked the Secretary of State for Energy what subjects he expects to discuss at his next meeting with representatives of the National Coal Board.

Mr. John Moore: My right hon. Friend and I meet the chairman of the National Coal Board regularly and discuss all aspects of the board's business, including productivity.

Mr. Dormand: Does the Minister agree that the miners have met every productivity target that they have been asked to meet since "Plan for Coal"? What does the Minister have to say about the disgraceful remarks made by the director of the CBI about the miners affecting the economy so badly?

Mr. Moore: I do not think that anyone on the Government side of the House has a more consistent record than I in arguing for the mining industry, when that is merited. We all wish to argue on the basis of fact. Until the last two and half years the productivity increments expected under "Plan for Coal" had not occurred. That is fact. We all welcome the current increased productivity. Equally, we all understand the difficulties through which the coal industry is passing. None of us wishes to underestimate those difficulties or to give an incorrect slant to the facts, as some outside the House might.

Mr. Canavan: Will the Minister warn the NCB that it would be a recipe for all-out industrial action if the NCB tried to force the closure of pits with workable coal reserves? I refer to Scottish pits such as Cardowan, where over 1,100 people are employed and which is on the NCB hit list. Do the Government seriously want a repetition of the 1974 confrontation which led to the ignominious defeat of the Tory Government?

Mr. Moore: As the NCB has made clear, there is no hit list. The hon. Gentleman's language does not assist the coal industry in trying, in the face of extremely difficult conditions, to develop markets for today and the future. The Government are not in the business of warning any side of the coal industry. The coal industry knows the

difficulties and will make decisions rationally. Governments do not have the ability to determine the future of individual pits, let alone decide on the engineering availability of coal in any pit in Scotland.

Fast Breeder Reactor (Programme)

Mr. Maclennan: asked the Secretary of State for Energy if he will set out the terms of reference for the discussions between the chairman of the Atomic Energy Authority and the chairmen of the generating boards on the programme for the fast breeder reactor.

Mr. John Moore: As my right hon. Friend has already informed the House, the chairman of the Atomic Energy Authority has been invited, in consultation with the generating boards, British Nuclear Fuels Ltd., and the National Nuclear Corporation, to draw up a fast breeder reactor development programme which makes the best use of our resources and experience.

Mr. Maclennan: What conditions has the Minister attached to the study? In particular, can he say whether the plans are contingent upon the participation of other countries? Is the domestic industry free to produce its own proposals?

Mr. Moore: To the extent that the domestic groups to which I have referred have been asked to draw up plans, the Government have said publicly that in the world of fast breeder reactors they would welcome the possibility and prospect of international co-operation. Equally, it has not been made a pre-condition, because obviously it might restrict the organisations in developing proper plans for our country.

Mr. Rost: Will the Minister confirm that one of the main objectives of the study is to simplify the design so that the cost of the fast breeder reactor can be brought within the realms of economic possibility?

Mr. Moore: It would be premature to deal with points such as those that my hon. Friend has just made. We wish to secure the best fast breeder development programme for our country.

Mr. John Smith: Is the Minister aware of the anxiety, not just in the locality of this fast breeder reactor, but over a more widespread area, that there is a possibility of a slowing down in the programme? Will he confirm that the Government will not put any obstacles in the way and ensure that the fast breeder programme continues actively?

Mr. Moore: I have difficulty in understanding the right hon. Gentleman's comments, because anxiety was expressed during the period of the review. However, I see from the local press that the director of Dounreay, the chairman of the Dounreay action council, the industrial head of the Highlands and Islands Development Board and the chairman of Caithness district council were pleased with the announcement. It seems to me that the fact that all those in the area who were legitimately worried during the process of the review have been reassured is crucial for the future of the programme.

Electricity Prices

Sir Geoffrey Johnson Smith: asked the Secretary of State for Energy when he last met the chairman of the Central Electricity Generating Board to discuss electricity prices.

Mr. Lawson: I am in regular contact with the chairman of the CEGB on all matters of mutual interest.

Sir Geoffrey Johnson Smith: When my right hon. Friend meets the chairman, will he thrash out the question of prices so that the small minority of intensive users can have a better deal? May I remind my right hon. Friend that he earlier said that they are not getting electricity at internationally competitive prices? If neither my right hon. Friend nor the chairman can do anything, will they prevail on someone else in the Government to take action, as those users are a crucial part of British industry?

Mr. Lawson: I recognise my hon. Friend's anxiety, which he has voiced on a number of occasions. The Government have already done a great deal. I mentioned the £100 million contracted consumer load scheme announced in this year's Budget and I have made it clear, that, with the industry's agreement, there will be a standstill on electricity prices next year. In real terms they will fall for everyone. That is of great benefit. Over one half of the £500 million benefit will go to industry. Certain countries subsidise consumers in various circumstances, but I am sure that my hon. Friend would not suggest that we equal every subsidy given. If that is what he is suggesting, how does he suggest that we pay for it?

Mr. Moate: If my right hon. Friend agrees that the key to electricity prices is the competitive position of coal, what is the economic logic of the National Coal Board exporting coal to the Continent at prices below those available to United Kingdom customers?

Mr. Lawson: I believe that my hon. Friend is referring to one particular contract with France. The National Coal Board is doing everything that it can to make the industry more efficient and bring down the cost of coal. That will help British industry and the nation, and I hope that it will command the support of both sides of the House.

Oral Answers to Questions — HOUSE OF COMMONS

Accommodation

Mr. Dormand: asked the Lord President of the Council if he will make a statement on the progress being made in providing improved office accommodation for hon. Members.

Mr. Dubs: asked the Lord President of the Council if he has any proposals to improve the working conditions of hon. Members.

Mr. Canavan: asked the Lord President of the Council what representations he has received about the adequacy of accommodation for hon. Members in the House.

The Lord President of the Council and Leader of the House of Commons (Mr. John Biffen): The matter of hon. Members' accommodation has been raised with me by a number of hon. Members.
The Accommodation and Administration Sub-Committee of the Services Committee is currently considering the use that the House might make of refurbished premises fronting Parliament Street, between Derby Gate and Bridge Street, to the west of Cannon Row. A report will be made to the House as soon as practicable on this proposed development and on the possibility of developing the remainder of the Bridge Street site.

Mr. Dormand: Is the right hon. Gentleman aware of the Opposition's anxiety over the lack of progress on this? Can the right hon. Gentleman confirm that the offices in Parliament Street and Bridge Street will not be available for another five years? Does he accept that the efficiency of hon. Members is affected by their working conditions, which would not be tolerated outside this place?

Mr. Biffen: The extent to which our working effectiveness is governed by the accommodation available is a subject for argument in the House. I am advised that the buildings should be available, if the plan is confirmed by the House, in 1987–88. I can confirm that progress has been made in the consideration of phase 1 of the site. Evidence should be published before Christmas.

Mr. Dubs: Is the right hon. Gentleman aware that people who know about our working conditions are appalled by them and believe that it is our own fault that we have made no progress? Does the right hon. Gentleman recall that three years ago proposals were made for a new building on the other side of the road, but nothing has happened? More rapid progress is required.

Mr. Biffen: The work undertaken by the Accommodation and Administration Sub-Committee of the Services Committee deserves the praise of the House. It is proceeding in circumstances where its decisions by no means have the unanimous approval of the Chamber; in fact, quite the opposite. As to the hon. Member's first point, I was not aware that the public were appalled at the working conditions of hon. Members. I believe that they are much more appalled at the luxury of other public offices.

Mr. Canavan: How much longer will we have to tolerate the position where some hon. Members have to share cramped office space, about the size of an average bathroom, while Members of the other place have nice big, spacious, luxurious offices to themselves at the other end of the same building? Is that not another argument for supporting Labour Party policy to abolish the other place so that the office accommodation at the other end of the building can be put to better use by the elected representatives of the people?

Mr. Biffen: I realise that the case for the abolition of the other place becomes a little threadbare as it is debated ahead of the general election. I shall give the hon. Gentleman whatever argument he chooses to reinforce it.

Sir Geoffrey Johnson Smith: Is my right hon. Friend the Leader of the House aware that we are coming to the end of information technology year? When he looks at the present office accommodation will he consider what steps might be taken so that we can use some of the excellent technology and probably save a little on research assistants, of whom some people might think there are too many?

Mr. Biffen: I note what my hon. Friend says about the extent to which the House now enjoys the services of research assistants. With regard to the general issue of information technology, the use to which the Parliament Street site might be put, is one of the factors that will engage the attention of the Administration Committee.

Mr. John Wells: Is my right hon. Friend aware that every time there is an improvement in accommodation for hon. Members attendance in the Chamber declines? Is he


further aware that since the abolition of counts it is normal for there to be about 30 Members on the Government Benches and 12 Members on the Opposition Benches and nobody else, even during major debates? Therefore, will my right hon. Friend think long and coolly before he further discourages hon. Members from coming to the Chamber?

Mr. Biffen: I note what my hon. Friend has said. Other than the allocation of funds, those are not matters for my determination or the Government's. They are matters for the House. I am certain that when the House comes to resolve those matters it will take into account the overwhelming necessity to ensure that the Chamber remains at the heart of Parliament's acts and deliberations.

Mr. Straw: While I do not depart from, or disagree with, what the Leader of the House has said, may I ask whether he is aware that hon. Members on both sides of the House are accommodated in appalling conditions in the Cloisters downstairs, with 14 hon. Members sharing a corridor room? The room that I share is an elegant Gothic slum, which is so small that we cannot get to the bookcase because of the filing cabinet and we cannot get to the filing cabinet because there is a desk in the way. Will the Lord President say that the allocation of funds, over which he has responsibility, is something that he will treat with a great deal more urgency? Will he announce an allocation of funds so that the new building across the road can be brought into use long before 1987 or 1988?

Mr. Biffen: I preface my remarks by saying that my hon. Friend the Member for Rutland and Stamford (Mr. Lewis), whom I do not see in this place, will confirm that for about 10 years I had a desk in the Cloisters, and I found it an admirable working place. If it has degenerated into a slum, I can only solemnly reflect upon what ill-fortune has befallen it since I left. The hon. Gentleman will realise that the funding of the proposition would become part of the PESC programme, with which the Treasury is involved. Doubtless the representations of the House, after it has considered phase 1 of the Parliament Street site, will be taken into account in the implementation of the PESC programme.

Mr. Stokes: Despite all that we have heard, does my right hon. Friend agree that it is a great privilege to be here and that our work cannot be compared with any other occupation? Is it not therefore somewhat unseemly to have these continual complaints from the Opposition?

Mr. Biffen: The arguments that concern us are not merely advanced by the Opposition. It is properly a House of Commons affair. I agree with my hon. Friend that to serve in this building and Parliament is one of the greatest privileges that one can acquire. Although working

conditions are obviously important, none the less they are, if not subsidiary, complementary to the main role of speaking for one's constituents in the Chamber.

Mr. Hooley: Does not the Leader of the House think that there is some mild element of humbug and hypocrisy in the attitude of Ministers, who enjoy adequate accommodation and staff, yet treat with urbane contempt Back Benchers' requests for similar facilities?

Mr. Biffen: I believe that I would be advancing exactly the same arguments if I were sitting on the Back Benches as I advance from the Dispatch Box. My judgment will not determine the matter. It is a matter for the House itself.

Northern Ireland Committee

Sir John Biggs-Davison: asked the Lord President of the Council whether, in view of the competence of the Northern Ireland Assembly to consider and comment on certain proposed legislation and draft Orders in Council, he will make a statement about the policy of Her Majesty's Government on reference of matters to the Northern Ireland Committee of this House.

Mr. Biffen: I do not envisage any changes in existing arrangements, pending devolution of powers to the Northern Ireland Assembly.

Sir John Biggs-Davison: Is my right hon. Friend aware that when the Northern Ireland Assembly was preparing to debate security, for which it has no responsibility, the Northern Ireland Committee of this House was permitted to discuss what a dog licence should cost in Northern Ireland? Does my right hon. Friend think that the matter was properly thought out when the policy of the Northern Ireland Act 1982 was laid before the House?

Mr. Biffen: I gained the impression that some of the Northern Ireland Members were anxious that the Draft Dogs (Northern Ireland) Order 1982 should be considered by the Northern Ireland Committee of the House. Whether the Northern Ireland Committee could also consider matters of security must, I imagine, be a matter for representation in the normal way.

Mr. J. Enoch Powell: Will the right hon. Gentleman confirm that nothing so far done under the Northern Ireland Act 1982 has reduced the responsibility for legislation, constituents or general policy, of hon. Members representing Northern Ireland constituencies?

Mr. Biffen: Certainly that is my understanding in relation to the operation of the Northern Ireland Committee, which is the subject of the question.

Command War Headquarters

Mr. Michael Meacher: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the proposal to site the United States European command war headquarters in the United Kingdom, whether at High Wycombe or elsewhere, when it has never been openly discussed or debated in the House".
This is a proposal of the utmost gravity. It raises questions of life and death for every man, woman and child in the country, yet the nation learnt of it only as a result of a newspaper exposé. Hon Members on both sides of the House are anxious that matters of vital national interest should not be dealt with behind Parliament's back. It is by chance that the matter has come to light before a decision has been taken.
The matter is specific and crucial. The acquisition of a European command war headquarters exposes our people to the much greater likelihood of a pre-emptive nuclear strike in the event of hostilities anywhere in the region of Europe. Our entanglement in a nuclear war through a possible American confrontation elsewhere, over which we would have had no control, is of supreme importance to all our citizens. It has been estimated that our involvement in a nuclear war would cause the death of four out of every five of our citizens.
The matter is urgent. It is clear from the confirmation of the report by a Minister in the Ministry of Defence that the matter has been under consideration for a considerable time and that a decision is imminent—if it has not already been taken. It is a vital decision, affecting millions of our people, and should not be taken behind closed doors.

Mr. Speaker: The hon. Member for Oldham, West (Mr. Meacher) gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House under Standing Order No. 9, for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
the proposal to site the United States European command war headquarters in the United Kingdom, whether at High Wycombe or elsewhere, when it has never been openly discussed or debated in the House".
As the House is well aware, I do not decide whether an important matter is to be discussed; the decision is in other people's hands. I am directed to take into account the several factors set out in the order but to give no reasons for my decisions in reply to requests for emergency debates.
I listened carefully to the hon. Gentleman, as the House did, but I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit it to the House.

Private Members' Business

Mr. Leo Abse: On a point of order, Mr. Speaker. I wish to raise two matters following the debate on Friday.
First, those of us who are exceedingly jealous of the time accorded to private Members are particularly anxious about the manner in which the debate was conducted, because it had the effect of impinging on the opportunities for hon. Members to speak. Under the terms of the motion, the debate involved the relationship of this country with other countries. The Minister chose to speak early in the debate and he did so for about an hour. Although hon. Members were still waiting to speak, Mr. Deputy Speaker later chose to call the junior Minister to speak as well, so that on a private Member's day the Government hijacked one hour and 20 minutes of debating time. It would be an unhappy precedent if it led to a similar occurance again in private Member's time, unless there were compelling reasons.
Secondly, it was not a regional debate but affected all hon. Members. Out of 635 hon. Members, only 12, or 1·9 per cent., represent Northern Ireland. As long as we continue to rule Northern Ireland from this Parliament, hon. Members representing Scotland and Wales should not be under the grave disadvantage of being treated as they were on Friday, when far more hon. Members for Northern Ireland were called than were called from the rest of the United Kingdom.
As it is likely that we shall continue to rule Northern Ireland from this Parliament for some time, the status of the Chamber should not be diminished by being used as a Northern Ireland Assembly whenever we have a Northern Ireland debate. In future, would it be possible for the Chair to guide the House and restrain speakers so that Back Benchers are not deprived of the opportunity to speak in a debate that is important to us all?

Mr. K. Harvey Proctor: Further to that point of order, Mr. Speaker. I, too, was in the Chamber for the five hours on Friday and was not called to speak. I might have been disappointed about that, but I support the Chair's decision. I found the debate interesting and was pleased to hear the wide views from hon. Members from Northern Ireland and elsewhere.

Mr. Speaker: Order. It is unusual for the Government to take one and a half hours in private Members' time, and it is a little unusual for a Minister to speak for 23 minutes after the Government have spent an hour in opening, but it was an unusual debate.
Secondly, the speeches on Friday were exceptionally long. I have a list of those speeches. The shortest—I shall not give the name of the hon. Member who made it—was 16 minutes long and the others were in the realm of the high twenties, and even 37 minutes on one occasion. I shall not give the names of the hon. Members who made those speeches either.
It is true that the subject being discussed during a Northern Ireland debate is a matter for the whole House, but I believe that priority is bound to be given to those hon. Members who are sent here by the electors of Northern Ireland when we are discussing what is primarily their major consideration.
I am sorry that the hon. Member for Pontypool (Mr. Abse) sat here all day and was not called. It is the gravest problem for whoever occupies the Chair when that type of thing happens.

Nuclear Weapons

Mr. Frank Allaun: On a point of order, Mr. Speaker. The application of my hon. Friend the Member for Oldham, West (Mr. Meacher) for a debate under Standing Order No. 9 has been turned down, and I do not intend or wish to repeat his argument, but you will be aware that on several occasions in the past 37 years decisions have been taken on nuclear weapons without the British people being told. As the Government Chief Whip is present, may I ask you to ask him to arrange a debate on this subject so that recent experience will not be repeated in the immediate future?

Mr. Speaker: The Government Chief Whip is usually characterised by his silence in the Chamber. I am afraid that the hon. Gentleman's point of order is not one that I can answer.

BILL PRESENTED

TRAVEL CONCESSIONS FOR THE UNEMPLOYED (No. 2)

Mr. Alfred Morris, supported by Mr. Charles R. Morris, Mr. Lewis Carter-Jones, Mr. Andrew F. Bennett, Mr. Stanley Orme, Mr. Frank R. White, Mr. Gerald Kaufman, Mr. George Morton, Mr. Tom Pendry, Mr. Robert Litherland, Mr. Ken Eastham and Mr. John Evans, presented a Bill to provide for the extension of travel concessions to registered unemployed persons and persons working under the youth opportunities programme: And the same was read the First time; and ordered to be read a Second time upon Friday 11 February and to be printed. [Bill 43.]

Statutory Instruments

Mr. Speaker: By leave of the House, I shall put together the Questions on the two motions relating to draft statutory instruments.

Ordered,
That the draft Oil Taxation (Gas Banking Schemes) (No. 2) Regulations 1982 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Unfair Dismissal (Increase of Compensation Limit) (No. 2) Order 1982 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Boscawen.]

CURRENCY BILL

Ordered,
That the Currency Bill be referred to a Second Reading Committee.—[Mr. Boscawen.]

CIVIL AVIATION (EUROCONTROL) BILL

Ordered,
That the Civil Aviation (Eurocontrol) Bill be referred to a Second Reading Committee.—[Mr. Boscawen.]

Tenants' Rights

Mr. Doug Hoyle: I beg to move,
That this House expresses its disgust at the appalling treatment by this Government of tenants, public and private, and calls upon it to accord these citizens equal treatment with private owners of property in order to remedy the injustices which the Government is imposing upon them.
The motion refers to a substantial number of people—about 44 per cent. of the population. I am asking that they be accorded the equal treatment that they were promised by the Prime Minister on the steps of No. 10 Downing Street when the Government came to office. The Prime Minister quoted St. Francis of Assisi. She said:
Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith and where there is despair, may we bring hope.
That message has a hollow ring to tenants, whether they be in the private or the public sector. It does not have that ring only to tenants, but I shall deal with the plight in which they find themselves under the present Government.
Rents paid by council tenants have in many cases more than doubled in the past three years and the subsidies that they have been given have been reduced. In 1978–79 the subsidy given by the Government was £1,004 million and the rate fund contribution was £200 million, yielding a total of £1,204 million. In 1980 the Government subsidy had decreased to £915 million, the rate fund contribution was £362 million, which made a total, at 1978–79 prices, of £865 million.
The planned figures for 1982–83 are even worse. The Government subsidy is to slump to £592 million and the rate fund contribution is to be £325 million, producing a total of £917 million. At 1978–79 prices, that £917 million is only £578 million. Therefore, the planned subsidy for 1982–83 is less than 50 per cent. of what was given in 1978–79. It means that the future of private tenants is bleak. It also means that they are being punished, when they are already suffering. Because of the Government's economic policies, many of them have lost their jobs. They are distressed and finding things extremely difficult.
Moreover, tenants are finding that local authorities are spending less on essential repairs. The housing stock will fall increasingly into despair as a direct consequence of the Government's policies. There is another facet of the problem. It used to be the case that young couples who got married could look forward to becoming tenants of a council house. Those who live in a community that calls itself civilised have a right to decent housing. They also have a right to expect either facilities to purchase a house or rented property to be available.
We know from long experience that, irrespective of what is done in the private sector, the quantity of rented property is decreasing, but under successive Governments it has always been possible to obtain a council house for rent. That applied under previous Tory Administrations, but they were nothing like the present one. The facility to obtain council houses for rent is being removed rapidly.
I shall quote the figures for local government starts and completions that have been given to me. In 1978 there were 79,517 starts and 101,877 completions. In 1979 there were 58,424 starts and 79,005 completions. In 1980 starts slumped dramatically to 37,492 and there were 79,896 completions. In 1981 starts had slumped again to 26,399

and there were 58,101 completions. The figures are even worse this year. In the first six months of 1982 there were 17,649 starts and 17,726 completions.
All that has occurred under a Secretary of State who, when in Opposition, repeatedly castigated the Labour Government for their building programme. The right hon. Gentleman was was fond of saying how disgraceful it was and how, when the Tories came to office, that sad state of affairs would be remedied. In reality, things are very different from what the Secretary of State for the Environment suggested. In the first six months of this year starts numbered only 17,649 and completions 17,726. If this continues, at the end of the year these will total 38,000 and 36,000 respectively.
When I talk of tenants in privately rented accommodation, I am talking of 44 per cent. of the population, or 9 million people. The vast majority of them will be unable to get a home of their own. The Government should be condemned, not only for their record but for their lack of interest in what has occurred in the housing sector.
It is disgraceful that many young people will have no opportunity to get a home. As a result, they will be forced into overcrowded accommodation or pushed into housing which, in many instances, is a disgrace. Such a state of affairs should not be allowed to exist. A remedy is needed, but the Government show no sign that they are taking any notice of what is happening.
The Tory Opposition used to tell us that they would find more privately rented property and strengthen the rights of private tenants. They used to say that they would become the friends of people in privately rented accommodation. The Secretary of State used to say that the Tories would tap the reservoir of empty private property and make it available. In reality, things are quite different.
As a result of the Housing Act 1980, housing is in many cases more expensive for private tenants. By that Act the Government reduced the minimum period for rent registration from three years to two years which means that landlords can have so-called fair rents reviewed every two years instead of three. It also means that instead of being spread over a three-year period, the fully registered rent becomes operative after two years, and that will lead to an escalation in the level of private sector rents.
A nasty shorthold tenancy provision was also introduced by the Minister for Housing and Construction and applied to lettings after November 1980. Under that provision a landlord can charge any rent and the terms of the letting can vary from one to five years. When we debated this matter we warned the Government that they were making a big mistake, because there was no requirement for compulsory rent registration.
The Government argued "Well, if the tenant so desires, he can always go to the rent officer". That is like telling a man armed with a peashooter that he can attack an army battalion armed with the most modern weapons. Nothing could be more suicidal, because if that tenant went to the rent officer he would more often than not be out on the street within six or seven months.
I am talking about some of the most defenceless people in our society. I am talking about young married couples who are unable to get local authority accommodation and who are desperate for any kind of accommodation. They will fall into the trap set by the sort of unscrupulous landlord about whom I am talking.
Students are equally affected but are not in a strong bargaining position. They will be forced to accept such


accommodation, as will people who have moved to obtain a job. Nowadays, people must be increasingly mobile and must travel the length and breadth of the country to find a job. When they do find a job, it is often extremely difficult to get accommodation. It may even be years before they can be reunited with their wives or families. They are likely to be caught in the snare that has been set by an unscrupulous landlord.
The game was given away when it was discovered that this provision did not apply to the London area, but even so it has not resulted in the availability of more property. Instead, it has allowed some unscrupulous landlords to make a killing. It has been a bad deal for the private tenant, yet the Government have allowed such things to occur.
Another difficulty faced by private tenants is the time taken by landlords to carry out repairs, even though many of the properties are in a shocking and disgraceful state. Even when private tenants have security of tenure, it is a long time before the necessary repairs are carried out. All hon. Members are aware of the frustration that results. We have all received letters about that or have met constituents who have told us about the conditions in which they must live. Many of them do not even know the name of the landlord, because their rent is collected by a nominee. However, they do know that it takes a long time for the local authority to obtain the necessary orders so that action can be taken.
As a result, frustration and despair occur and such people have a lack of pride in their home, simply because their basic needs have not been met. In my constituency there are still many private properties with no hot water or inside toilet. The same can be said of many other areas. Alternatively, many flats are in such a state of disrepair that they ought to be condemned immediately. Instead, it is a long time before any action is taken by the local authorities. That is the sort of frustration experienced by private tenants, and I am sure that all hon. Members have at some stage been approached by tenants in that predicament.
In many local authority areas, repairs that would normally be carried out fairly speedily are not being done because funds are not available. Some repairs are held up because of bureaucratic mismanagement or red tape. One of my constituents suffered a burst pipe in his kitchen during last year's severe winter. He reported it to the local authority, which tried to repair it but found that the stopcock in the kitchen would not close. The authority then asked the water authority to turn off the stopcock on the main outside, but it could not find the stopcock. That repair has still not been completed and my constituent has to put out a bowl overnight to catch the water that is still leaking in. Such frustration is unnecessary, even taking into account the backlog of essential repairs that have been held up because of cuts.
I know that I speak for many hon. Members when I say that my post-bag is full of queries about repairs that have not been carried out. Many people come to my surgery asking whether something can be done to speed up repairs. Sometimes they do not know what is happening. They may have reported the fault to the local authority through, for example, the rent collector.

Mr. John Cartwright: In many constituencies there are no rent collectors. All repairs

required are fed into a computer. The computer is not swift to respond to demands for action and the position becomes even more impersonal.

Mr. Hoyle: I accept what the hon. Member for Woolwich, East (Mr. Cartwright) says. A computer is only as good as the information fed into it. However good the local authority, the information is fed in by faceless bureaucrats and the tenant cannot obtain an answer. In many cases there is no human contact.
I hope that the Government will accept the amendment in the name of my hon. Friend the Member for Bolton, West (Mrs. Taylor) to the Housing and Building Control Bill, which calls for a tenants' charter. That may begin to solve the problems that I have outlined. A tenant who reports a fault to either a private landlord or a local authority could, after a reasonable period had elapsed and the necessary repair had not been carried out, obtain three estimates from an approved list of builders held by the local authority. To provide a fair comparison, one builder would be the direct labour organisation of the local authority. The tenant must accept one of the three estimates, call in the builder to carry out the repairs and then send the bill to the local authority or the private landlord for payment. In that way we might overcome the difficulties that I have outlined and the difficulties with computers. It would certainly reduce the delay and the frustration of tenants.
The period meant by "reasonable" would vary according to the repairs. About four weeks would be long enough to wait for a new gate, window or door. For structural repairs, tenants must wait much longer before action is taken. However, those details can be filled in later. We must overcome the menace of the bad landlord in the private sector. In the charter that I have outlined, the good private landlord has nothing to fear. Good local authorities which are prepared to keep in touch with tenants and to ensure that repairs are carried out will have nothing to fear. But the bad local authority, where there is much red tape, frustration and bureaucracy—

Sir Albert Costain: Is the hon. Gentleman trying to persuade the House that there are never bad tenants but only bad landlords?

Mr. Hoyle: The hon. Gentleman knows that I would never say that. There are bad tenants, just as there are bad landlords, but at the moment most of the frustrated tenants are good tenants. They take a pride in their property and wish to see it kept in good repair. We wish to deal with the bad landlord who will not carry out repairs, and the absentee landlord who may be unknown to his tenants. Tenants are frustrated by "get rich quick" landlords who will not carry out repairs.
The charter that I have outlined would bring much relief, end frustration and begin to improve housing standards. The Government must consider such an amendment favourably. Most repairs begin as small repairs, but the longer they are left the larger they become and the more they cost to carry out.
In the Housing Act 1980 provision was made for the establishment of a charter for tenants. Welcome though it was, it was a watered down version of what would have been in Labour's 1979 Housing Bill. Tenants feel great frustration. They are often unaware of the general direction of the local authority's housing policy. Often they are not consulted about decisions. Although the


measure made provision for participation, that should now be taken a stage further. There should be real participation, so that people are aware of what is happening. They should be free to partake in the making of decisions. It would give them a pride in the estate or area in which they live.
In addition to meaningful participation, there should be a growth of tenants' co-operatives. One or two have been established, but I should like to see the establishment of self-managing co-operatives in which tenants can play a positive role in management. That would do much to solve the problems which occur on many estates where there are rundown houses and much frustration.
Sometimes vandalism occurs because of tenants' frustration with what they find round about them. However hard they strive, they are unaware of what is happening. They feel that they are not in touch with the people on the councils. The position was not helped by the reorganisation of local government, because people felt more and more divorced from what was happening in the local authority. Although many councillors try hard to keep closely in touch with tenants, there is still a need for a positive role for tenants in the management of their estates. There should also be decentralisation so that decisions are taken as near as possible to the estates.
Tenants now find themselves in a more difficult position in relation to owner-occupiers. I say at once that I believe in help being given to owner-occupiers. Everything possible should be done to help young married couples who want to own a house of their own. However, whatever scheme is devised, there will always be some people who cannot afford a house of their own and will have to seek property in the rented sector.
The wealthier the owner-occupier, the better his position in relation to tax exemption and grants, but the ordinary private tenant who has been protected by legislation that keeps the rent of the property below the true market cost is finding that his protection is being slightly nibbled away. Council tenants are also finding that subsidies are being phased out. Council house rents have doubled in the last three years and are likely to increase in the future. That is unfair, particularly to the section of the community least able to defend itself.
There should be a general social subsidy on housing which tries to provide equity between owner-occupiers, council tenants and those in the private rented sector. Housing should be regarded as a social service. Good housing ought to be available to all. That is not possible at present, because of the Government's housing policies. They are obsessed by political dogma which leads them to believe that the best solution is for everyone to own his own house. The dream of a free market economy that would give everyone the best of all possible worlds is an impossible dream. It is unrelated to reality. There is a demand, and always will be, for rented property. There should be a subsidy, but it should be a general subsidy on all housing.
I hope that the Minister will take a leaf out of the housing programme outlined at the last Labour Party conference. Relief should be given to those who are most hard pressed. There should be a statutory one-year rent freeze. It should apply not only to council tenants but to the private rented sector and to housing associations. That would help to provide equity between each sector. In the longer term we should look at the rented sector as a whole and bring the housing associations and private rented property more into line with local authority housing.
I referred earlier to the mortgage relief that is given to the owner-occupier and said that I was strongly in favour of it, but I am not in favour of benefiting the very wealthy in our society in that respect. The cut-off should be at the standard rate of income tax. That is where help can be given to most people. While benefiting the greatest possible number, it would prevent benefit going to very wealthy people. The tax relief should be altered so that it acts in the same way as the mortgage option scheme—in other words, like a subsidy. That is one of the ways in which we could begin to move towards equity.
The Government are mistaken if they think that they can somehow wave a wand and prevent any further diminution in the private rented sector. They often say that the private rented sector diminished under the Labour Government, but it is diminishing even while the Tories are in office. That decline is irreversible. The Labour Government were moving in the right direction. The next Labour Government should move in a similar direction. They should, by every means available, actively encourage the transfer of the private rented sector into the public sector. As far as possible the private rented sector should become public. That is the only way in which we can ensure that there will be a fair deal for tenants.
Housing problems in inner cities, far from getting better, are getting worse. Problems have been caused by high-rise flats. There have been defects in the structure of flats that were built in the post-war period. Problems have been caused because successive Governments believed that high-rise flats should be built because there was a shortage of land. However, those flats separated people from their neighbours and broke up the community spirit that used to exist in inner city areas. People feel a sense of frustration because they are isolated. There is also the problem of the rundown of inner city areas. Things are not getting better in those sectors, but worse.
The answer to those problems is not to send in a blaze of glory, as if he were Messiah coming down to earth, the Secretary of State for the Environment. In Liverpool he came, he saw and he proposed, but the problems remain. The planting of a few trees in the centre of Liverpool is not the answer to the problems there. The problems in Liverpool, which were largely the result of a lack of employment, decent housing and education facilities, are still there. In many inner cities there are racial problems. There could be an eruption at any time unless a major effort is made to solve the problems.
The problems are partly caused by a lack of housing. What we are saying about Liverpool applies to other inner city areas as well. In Liverpool there should be an investment of a large sum of money to provide decent housing, to give people a sense of belonging and to rekindle the community spirit, which is absolutely essential if we are to combat the growing vandalism and sense of frustration and suspicion, particularly between the races. The Government must rethink their policy.
The Government will not solve the problems by having a free market economy or by making appeals, however well-meaning, to the City to bring people in black coats and pin-striped trousers to Liverpool and other cities to make proposals. They will not begin to touch the problems by doing that. Many of the problems in such areas are tenants' problems. The Government need more imagination. Money must be put into those areas. The problems can be resolved only within the public sector. The money that is put in must be in the hands of the local authority.


It must be used in such a way that the people in the communities are involved in a partnership, so that the problems can begin to be solved.
The Government treat housing, as they do many other things, dogmatically. They look at it in a narrow political sense, as if all the answers can be found through the market solution. For housing, that is not true. More imagination and flair are needed. Their policy should have a new look about it.
The debate will be invaluable if the frustration of tenants, both council and private sector, is brought home to the Government. I hope that the Minister will give a sign that the Government are not only aware of those things but have a more radical plan for beginning to tackle the problems, which will not go away, but will become worse. The time to begin to solve many of them is growing short. I ask the Government to listen to the comments of those who take part in the debate. Many hon. Members will describe the problems faced by tenants. Whatever solution they propose, they will probably agree that it will take more than the £109 million that the Minister for Housing and Construction proposed last week to begin to solve the problems.
If the will is there, the problems can be solved. If the money was made available, employment would be provided in the construction industry, which is one of the most hard-pressed industries in the country and which has one of the highest unemployment rates of any industry. By making the money available the Government would bring not only employment but satisfaction to a deserving section of the community—the 44 per cent. of the community who are tenants. I appeal to the Government to do something to help them before their frustration boils over.

Sir Albert Costain: We have just listened to a speech on housing of almost one hour. The only suggestion of the hon. Member for Warrington (Mr. Hoyle) to solve the problem is that basically housing should be nationalised and taken over by local authorities. To give him his due, he has criticised local authorities and the way in which they have managed housing, but he still thinks that nationalisation is the solution.
I should like to ask the hon. Gentleman one or two questions. Will he give me any reason why houses are in short supply at present other than that they are rationed and controlled? Can he tell me of any other commodity than housing that is in short supply? Does he realise that housing is rationed and controlled?
I do not know where the hon. Gentleman lives. He did not declare an interest. He did not say whether he was a tenant or a landlord. My impression is that he lives in Dolphin Square. I thought that I saw him there. I may be wrong.

Mr. Hoyle: The hon. Gentleman is wrong.

Sir Albert Costain: The hon. Gentleman was probably going swimming there. I did see him there, but I shall not press him.
Dolphin Square is a perfect example of a block of flats that was built by private enterprise for private tenants. It

has been a great success. If my records are right, there have always been at least 40 Members of Parliament living there since the day it was built.

Mr. Hoyle: To say that the conditions in Dolphin Square exist throughout the private sector would be to talk about a different world. The hon. Gentleman knows as well as I do that the reality is different. Many landlords are not prepared to keep their property in good repair. I was addressing my remarks to tenants in such circumstances.

Sir Albert Costain: The hon. Gentleman is kind enough to say that I know as much about housing as he does. I suggest that I know a darned sight more. The company with which I was connected built tens of thousands of fiats. It would undertake developments such as Dolphin Square time and time again if it were not for rent restrictions. Before rent restrictions were introduced, which was during the First World War, most pension funds invested in private rented accommodation. The unions were only too happy to invest their funds in housing to let for their members and others. In other European countries where there are no controls private rented accommodation is being built to the great advantage of all.
Every proposal that Labour Governments and Oppositions make is designed to stop housing being built for rent. This stops the provision of badly needed accommodation. My solution to the housing problem would be aimed precisely in the opposite direction. Rent restrictions should be removed immediately in any area where the supply of houses exceeded demand. The Government have given many concessions in their enterprise areas, but I am disappointed that when houses are built to let they are still controlled.
The hon. Member for Warrington referred to shorthold tenancies. He claimed that they are not producing the desired results. He omitted to say that 30,000 houses are standing empty because shorthold tenancies are not being taken up as they should be. They are not being taken up because Opposition housing spokesmen have repeatedly threatened or promised that the Labour Party, if ever returned to office—heaven forbid!—would alter the law on shorthold tenancies. The result is that no one will build houses to let on these tenancies. If they built them and the Labour Party was returned to office, they would witness the cancellation of the shorthold concept.

Mr. Joseph Dean: If the hon. Gentleman is a supporter of building housing for rent in the private sector, will he tell us why houses or flats were not built for rent subsequent to the 1957 rent legislation, which produced Rachman?

Sir Albert Costain: The hon. Gentleman seems badly to have misunderstood me. I have said that housing for rent would be built by means of the investments of pension funds and unions. That would happen in the absence of rent controls.

Mr. Douglas Hogg: Is not the answer to the hon. Member for Leeds, West (Mr. Dean) that after the 1957 Act the tenant of furnished accommodation did not have security of possession? It is only recently that that security has been extended throughout the housing market.

Sir Albert Costain: The answer lies in supply and demand. The Opposition must realise that if all their proposals are against the landlord and in favour of the tenant the landlord will not build  houses for tenants. How


simple can we make this? The hon. Member for Warrington has union connections. Perhaps he will explain why trade union pension funds are being used now to invest in antiques. The answer is that there are no controls on antiques. The unions do not build houses to let because of the controls.

Mr. Joseph Dean: If union funds had been used to buy some of the housing in the area that I represented in Manchester 15 to 20 years ago, they would have been buying antiques.

Sir Albert Costain: I do not know the housing position in Manchester. As a Liverpudlian I never refer to housing in Manchester. If I took up Manchester's housing, or any of its other issues, I might be had up for slander. This is an old Liverpudlian-Mancunian situation. If I went into it now, I should bore the House.
As I have said, the answer lies in the basic principle of supply and demand. If enough premises were available for rent in the areas where prospective tenants wanted them, there would be no need for controls. There are controls because that level of supply does not exist. The controls will not be removed until prospective investors recognise that it will be worth while to invest.
The company with which I was connected built many houses to let over many years. In the end it had to build rented accommodation abroad and to concentrate on building office properties in this country. It built up a business of constructing blocks of flats and offices to sell to pension funds as investments. That meant that the company had sufficient funds to allow it to continue building. The pension funds discontinued this form of investment when controls were introduced. They decided to invest in office blocks and my company had to switch its operations from domestic housing to office blocks. It did not want to do so, but its hand was forced because it could not afford to build without the prospect of selling.
The hon. Member for Warrington talked about high-rise buildings. Does he realise that no private property company would have dreamt of engaging in high-rise building? These developments were introduced only when local authorities decided to take over the building of flats to let—[Interruption.] If the hon. Member for Leeds, West wishes to intervene, I ask him to rise in his place and not to growl at me. Do not growl at me, please, for it is bad manners.

Mr. Hoyle: The hon. Gentleman is painting a picture of conditions that disappeared a long time ago. He is talking about conditions before the First World War when 90 per cent. of rented accommodation was in the private sector. Will he explain why successive Governments since the end of the Second World War have chosen, quite rightly in my view, to protect tenants against landlords like Rachman and others? Surely it has been necessary to do this. Is he not harping on an era that will never return?

Sir Albert Costain: If the hon. Gentleman is saying that I am harping on a situation that will never return, he is admitting defeat. Rent controls were introduced during the First World War. There were about nine housing reports at that time. As a boy of 12 I went with my father to the first council estate to be built. It was built at Bootle. I remember being told "This is a council estate. It will provide homes for the heroes whom Lloyd George has been talking about. We are building 50 houses for the

Bootle corporation. The people will not really want to live in them because they will think that they are almshouses. They will live in them for only three, four, six or nine months. They will want these council houses while they are waiting for accommodation to be built following the war."
However, the Government decided to retain controls because housing was in short supply. Unfortunately, the hon. Gentleman's mind is made up and he does not want to hear the facts. He must realise that landlords will invest in housing only when they recognise that it is worth while doing so. The hon. Gentleman keeps talking about the need for tenants to have certain rights. He says that tenants should have the right to have repairs done to their property and draws attention to landlords' obligations. If a window is smashed or a back door is broken, he says that he should be able to inform the landlord and to have the repair work done at his convenience.
What happens if a tenant and his family break the windows once a week? This happens in some areas. What happens if that and other damage is caused regularly by the tenant? I have seen houses where things have been thrown at the husband that damaged the plumbing and the electric work. It has taken two to three estimates to repair the damage done during a wifely row.
The hon. Gentleman must get it right. I admit that there are some bad landlords—I have one in my constituency. I am doing my best to get rid of him. Thank goodness, I have only one. However, I have more than one had tenant, but the hon. Member is saying that they should never be got rid of. All they should do is live in a house, make a mess of it, spoil it and move on, leaving the landlord to fix it. It is simple. We are short of houses to let because there are controls. If controls are released, there will be houses to rent. It is as simple as that.

Mr. Robert Edwards: I should like to follow the speech of the hon. Member for Folkestone and Hythe (Sir A. Costain) in some detail because we have listened to the genuine voice of the builders. He referred to the period when the trade unions put money into the building of houses, through the National Housebuilders Guild. Many of our trade unions emptied their treasuries for that project. However, the building materials monopolies made it extremely difficult for the guild to get supplies. It negotiated thousands of agreements to build houses for local authorities, fine high-quality houses at low rents.
The Tory Government of the day were so scared at the development of the guild that they introduced legislation in a new housing Bill that made it almost impossible for the guild to negotiate new agreements with local authorities. It was this that destroyed the majestic project under which the unions were financing the building of good quality houses at low rent for the people. That is the true history of the finance of the guild.

Mr. Joseph Dean: Is my hon. Friend aware that some of the housing schemes that started with trade union backing had to be taken over by the local authorities, but still stand today as some of the best value for money in bricks and mortar, if one takes a 60-year loan repayment period into account?

Mr. Edwards: My hon. Friend confirms what I was saying about the National Housebuilders Guild. The


unions were ready not just to put pension funds into building but to put general funds into the building of high-quality houses.
We are grateful to my hon. Friend the Member for Warrington (Mr. Hoyle) for introducing this subject for debate. I thought his speech was a majestic one, constructive and well argued. I compliment him on his remarkable speech, which will read well in Hansard tomorrow. The speech was so constructive that it is rather difficult to follow. I should like to say the same things. However, there are a few issues that he has not mentioned with which I should like to deal.
A report is coming out this week dealing with housing in England. It states that one in every 10 houses in England is not fit for human habitation. It goes on to say that there are 1 million houses in England that lack basic amenities. This is a scandal, and we should be ashamed of ourselves as Members of Parliament that we allow such a problem to exist.
We need millions of houses. Every hon. Member here knows that at every surgery we attend half of the cases are to do with housing, with young couples on long housing lists and old people in high-rise flats who want to get out because their lives are a misery. These flats should be razed to the ground, just as some of the slums should be razed to the ground.
We are in the middle of a period of depression, with 4 million unemployed, and we should be thinking in terms of rebuilding our cities and inner cities. What is the problem? There are 400,000 building trade workers unemployed—denied the right to work. There is plenty of land, and millions of bricks piled up unused. There is all the skill in the world and thousands of unemployed steel workers who could supply the steel needed. Pilkington Bros. is closing part of its glassworks, when that glass could be used for building houses. What is the problem? Is it a shortage of money? There is no shortage of money. We do not know what to do with the money that we have.
Lloyds Bank has just received permission from the Government and the Bank of England to loan the Fascist Government of Argentina £600 million. It is enough to make the 400 British Tommies who died in the Falkland Islands turn in their graves that we allow such a thing. We cannot find money to clear the slums but we find money to sustain the declining economy of this Fascist dictatorship. How can this be justified?
The pension funds have been mentioned and there is about £60 billion in them, but the money is being invested in South Africa, Latin America and the new technology overseas to compete with our own new technology. I do not blame the unions for this. They have very little control over pension funds.

Mr. Hoyle: Does not this make the Labour programme to reintroduce exchange controls and set up an international investment bank that would invest in the construction industry and in projects such as those that my hon. Friend is describing essential if we are to get out of the economic mess that we are in?

Mr. Edwards: My hon. Friend is a loyal member of the Labour Party and subscribes to its policy. However, the present financial system has failed—it has broken up all over the world and we know it. We need massive Government intervention to use the money that is not

being used effectively to reconstruct our country and put people back to work. This seems to be an elementary issue. One of the big construction jobs that is crying out loud to be done is the rebuilding of our inner cities. We must make our cities fit for our children to live in, in security and dignity. That is what the Labour movement wants to do with the funds that are available but are not being used.
My hon. Friend the Member for Warrington mentioned a charter for council house tenants. In 1969 I introduced a Private Member's Bill entitled the Council Tenants' Charter Bill, which aimed to
Establish a charter of rights for council tenants.
I introduced the Bill twice and received a promise from the Labour Government of the time that they would find time for it. Unfortunately, we lost the election and with it the opportunity to enact my Bill. However, I was given a promise that time would be found, and I accepted that promise.
My Bill was a simple one that asked that the 5 million council tenants should be consulted, that there should be a statutory body so that they would have some say over rents, amenities and referrals, and that every council estate should have a tenants' council.

Mr. Douglas Hogg: The hon. Gentleman said that he was promised by the Labour Administration that Government time would be found for his Bill. When was that promise given?

Mr. Edwards: It was included in the Labour Party's manifesto for the following election. Unfortunately, we did not win the election. I was promised that it would feature in the then Government's policy and that time would be given for such a Bill. I accepted that promise from my Chief Whip and the Leader of the House, because I introduced the Bill on two occasions. I must also point out that it was not a negative measure; it was not just for council house tenants. I also introduced a Private Member's Bill to protect home owners against jerry builders, and we had a considerable debate in the House on those two subjects.
It is still valid to have a charter covering council house tenants. I repeat, there are 5 million of them. They are a very important section of our community. This country is one of the most backward in the world when it comes to consultation. There is very little consultation in industry and almost none in housing, whether it be in the private sector or in the sector controlled by local government. It is time that we brought house owners and tenants into active participation in the running of their estates. If nothing else, it would end vandalism.
I remember an occasion in my constituency when a number of small trees were planted, and they were vandalised. Council officials visited local schools and asked every child to adopt a tree. That ended the vandalism, because each child had a tree to conserve. That is the kind of participation that we should support actively.
I know that other hon. Members wish to take part in this debate. The case has been made extremely well by my hon. Friend the Member for Warrington. But even at this late hour I ask the Government to co-operate with us to get some kind of dignity, control and participation among council house tenants. They need a charter desparately.

Mr. John Heddle: It is always a great pleasure to be called immediately after the hon. Member for Wolverhampton, South-East (Mr. Edwards) and, before I deal with the speech of the hon. Member for Warrington (Mr. Hoyle), perhaps the hon. Member for Wolverhampton, South-East or the hon. Member for Bolton, West (Mrs. Taylor) can explain why the last Labour Government gave the hon. Gentleman the green light to introduce a Bill establishing a tenants' charter, bearing in mind that in 1977 a Labour Government voted down a similar Bill introduced by my hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre). It seems to be yet another example of the Labour Party, when in Government, speaking out of both sides of its mouth and making contradictory statements.
There must be many hon. Members on both sides of the House who would give their eye teeth to come third in a private Members' ballot, many more to come second, and still more to come first. We should be grateful to the hon. Member for Warrington for giving the House the opportunity to discuss, in the words of the motion,
its disgust at the appalling treatment by this Government of tenants, public and private, and calls upon it to accord these citizens equal treatment with private owners of property in order to remedy the injustices which the Government is imposing upon them.
I congratulate the hon. Member for Warrington on selecting this subject for debate, because it gives Government supporters the chance to examine precisely what the Labour Party did in government between 1974 and 1979, what the present Government have done since 4 May 1979, and what the Opposition parties would do if they were elected, jointly or severally, at some future general election.
I should begin by declaring an interest. The hon. Member for Warrington spoke of rent collectors, and his comment was picked up by the hon. Member for Woolwich, East (Mr. Cartwright). More years ago than I care to remember, when I was an articled pupil with a firm of chartered surveyors, I started every Monday morning on a bicycle collecting rents, drinking more cups of tea than I wish to recall, and listening to complaints, some relevant to the properties and others more relevant to the families of the tenants whose rents I was collecting. Having declared that interest, I shall refer later to the vital and important role of the rent collector.
The hon. Member for Warrington will be surprised, as will the House, that I agree with one or two of his arguments. I agree that a number of local authorities are patently bad landlords and will invest the money that they raise from the sale of council houses not in their housing stock, but in mayoral cars and liveried chauffeurs. The Labour-controlled Tamworth borough council did precisely that this month. Instead of making available bathrooms and new electricity circuits and curing the damp in properties in Bailey Avenue, Tamworth, for several of its needy and deserving tenants, the borough council decided to invest £20,000 in pomp and glory to provide Councillor Mrs. Nancy Padfield, the mayor of Tamworth, with a new Ford Cortina Ghia and a liveried chauffeur who is no doubt on an index-linked pension. I am entitled to ask the hon. Member for Warrington where the real priorities of Tamworth borough council lie.
The motion also enables the House to cast its mind back to the period of the last Labour Government, when the

hon. Member for Warrington was a Back-Bench Member. The House will recall that that Government were responsible for the Rent Act 1974. As with all Rent Acts, it had precisely the reverse effect to that which the legislators and parliamentary draftsmen intended. Instead of increasing the supply of furnished rented accommodation, the Act decreased it. Instead of decreasing homelessness, it increased it.
The hon. Gentleman's motion also affords us the opportunity to recall that, during the lifetime of the last Labour Government, homelessness doubled. In 1974, the number of registered homeless people was 27,500. In 1975 and 1976, after the implementation of the 1974 Act, the figure rose to 33,600. By May 1979, when that Government were denied a further period in office, the number of homeless families had risen to 57,200.
Perhaps the most damning indictment of the housing policies of the Labour Government is put no better than in the first leader in The Times of 1 February 1977:
The 1974 Act itself, extending security of tenure to the furnished tenant, only completed a long train of legislation concerned with the landlord only as potential oppressor. There are many clogs on the easy renting of housing that fall easily inside Mr. Shore's proviso about security of tenure—the cumbersome processes that a landlord entitled to repossess must go through, the limited categories of cases in which special circumstances are held to justify letting for a limited period, the complicated accretion of laws and customs governing the fixing of rents, and so on. The failure in its present form of the rent allowance scheme (taken up by only a third of those entitled to it) is a decisive bar to the creation of a rational rent system …But it is the excessive weight given to the tenant's security in all circumstances that most limits the usefulness of the private rented sector. As at every other level, our housing policy heaps benefits, often irrelevant, on the incumbent tenant at the expense of those who seek to become tenants themselves. A major easing of the housing shortage could be achieved by drastically widening the opportunties for a landlord to enter into an agreement with a tenant without signing his property away for a lifetime.
We must move on from 1974 to 1977. The hon. Member for Warrington was a Back-Bench Member of that Government, and he will recall his Government's housing policy review of 1977, which said:
If the decline continues"—
this refers to the private rented sector—
unabated and no action were taken to compensate for the loss of accommodation from that sector, many people—particularly new and mobile households—might not be able to find the housing they need. It might be argued…that this is already beginning to happen in a number of areas. To guard against this, we"—
that is, the then Government—
need to consider what action can be taken to stimulate the supply of lettings within the private sector, and what can he done to provide accommodation in the public sector.
What did the hon. Gentleman's Government do? They did precisely nothing. They did so little that no subsequent Labour Party conference even bothered to debate the findings of that Green Paper.
Perhaps I may remind the House of what Mr. David Webster said in an article headed
Why Labour failed on housing
in New Society of 17 January 1980. I am not a regular reader of New Society, but I suspect that its views are not entirely dedicated to all the philosophies and policies of the present Administration. Mr. Webster said:
Perhaps most culpable was the failure of Labour's annual conference to transmit the growing discontent of council tenants or to mount any real pressure to tackle bad conditions in council housing. This probably reflects the party's declining mass base. But such a stance would also have been inconvenient for the party's traditionalists"—


I include the hon. Member for Warrington among them.
Council housing 'must be good', by definition, because it is in the public sector.
There Mr. Webster sums it up.
What have this Government done in housing in three and a half action-packed years? Hon. Members may laugh, but I shall tell them precisely what this Government have done in three and a half years to help tenants in both the public sector and the private sector, and perhaps hon. Members will then admit that they had the opportunity during five whole years to do precisely the same, but that they let the opportunities pass by.
Did the Labour Government introduce a tenants' charter? No, they did not. This Government did. Did the Labour Government introduce security for public sector tenants? No, this Government did. Did the Labour Government extend to tenants in the public sector the right to take in lodgers to supplement their incomes? No, but this Government did. Did the Labour Government extend to tenants the right to sub—let, to provide accommodation for students, to provide the much-needed homes for first-time buyers, the newly-marrieds to which the hon. Member for Warrington referred? No, but this Government did. Did the Labour Government introduce the right for tenants to carry out repairs to the property that they hold either through the local council or a private landlord? No. This Government did, and, in particular, this Government increased substantially the improvement grants available to both private sector and public sector tenants. Indeed, recently my right hon. Friend the Secretary of State for the Environment announced the extension of the 90 per cent. improvement grants to April 1984, which must further stimulate demand in the construction industry.

Mr. Hoyle: The hon. Gentleman knows very well that in the 1979 Housing Bill, which would have been enacted by a Labour Government, there was a far stronger tenants' charter than the one in the Housing Act 1980. It ill becomes the hon. Gentleman to say such things, when he knows full well that that charter would have been introduced by a Labour Government.

Mr. Heddle: I am tempted to remind the hon. Gentleman of Nero's fiddling while Rome burned. Instead, I shall remind him and the House of the occasion when the great artist Turner was painting the "Fighting Téméraire". You will recall, Mr. Deputy Speaker, that most vivid and beautiful sunset. Someone said to Mr. Turner "I could have done that". Mr. Turner carried on painting, and said after a few minutes "Why didn't you, then?" That is my answer to the hon. Gentleman.
I understand why Labour Members do not sit easily in their seats. Did they give tenants the opportunity to obtain the information about who owned their property? The hon. Member for Warrington specifically referred to absentee and anonymous landlords. If he read through the Housing Act 1980 he would find it all there. The present Government gave tenants those rights. Did the Labour Government introduce a national mobility scheme, a tenants' exchange scheme, to get our wooden and static society on the move again? No, but this Government did. Did the Labour Government introduce facilities to bring forward rundown houses in inner city areas for sale, either outright or on half-and-half schemes? No, but this

Government did, backed up by generous grants of £7,500 in the provinces and £10,000 in London, to enable the houses which complied with yesterday's standards to be brought up to today's standards and to provide homes for young couples tomorrow.
Did the Labour Government introduce share purchase? No. This Government did. The hon. Members for Warrington and for Wolverhampton, South-East mentioned the plight of the inner cities. Inner cities can be given new life by enabling the people who live there to have a stake in their environment. That can be done best by allowing them to buy part of their home, if they cannot buy all of it now, and subsequently to buy more, as their job prospects improve.
The Housing and Building Control Bill, now in Committee, extends that right to many more council and private sector tenants. The Government have also introduced mortgage guarantee schemes to enable public sector tenants on low incomes to take out mortgages, and the Government will underwrite any loss that the local authority may suffer by selling to such tenants.
The Government have also introduced the priority estates project. In just over three years, they have, by enlightened estate management, brought forward 300,000 hard-to-let dwellings. The hon. Member for Warrington spoke of tenants' co-operatives. To an extent, I go along with him, but I commend to him and to the House the priority estates project. I know the plight of tenants who live in system-built high-rise blocks of flats, a subject dear to the hon. Member for Leeds, West (Mr. Dean). The hon. Member for Wolverhampton, South-East also referred to them. I agree with them that it is not morally right for tenants who live in such accommodation necessarily to suffer the dereliction that is not the fault of themselves, but, in large measure, of the architects and corporation officials who employed untried and untested materials and methods. That is why the House will welcome the Government's initiative in introducing the housing defects prevention units.

Mr. Joseph Dean: Before the hon. Gentleman leaves that point, it is not fair to blame only the architects and local authorities. I agree that they have a tremendous responsibility for introducing the monstrosities with which we are now saddled, some of which are having to be demolished, and for which the coucil house tenants still have to pay. However, the overriding driving force was successive Governments of both parties. Let us put some of the blame where it lies. The idea was to get an extra 100,000 units per year into the building programme. That was the way in which Governments said that it could be done. At local level, some of us in both parties opposed it, but unfortunately we lost the vote. The main culprits were Governments, and it was all to do with high-density subsidies.

Mr. Heddle: I do not deny that that is true, but the Government have done something about it by introducing their housing defects prevention unit and, more directly, by protecting tenants and people who have exercised their right to buy under the Housing Act and who have bought Airey houses. They will have the security of knowing that any inherent defects in those structures will not be landed at their front door.
In addition, the Government have introduced the shorthold scheme. Labour Members will sneer cynically


when we say that one reason why the shorthold scheme has not yet met the considerable demand for the right to rent is because the Labour Party is committed, out of sheer blind political dogmatism and hatred of the private landlord, private property and capital, to deny those awaiting the key to a council house the opportunity to rent. Does the hon. Member for Warrington agree that his party should withdraw its commitment to repeal the shorthold provisions of the Housing Act so that they can be given an opportunity to work?

Mr. Hoyle: The Housing Act is obviously not working. Why will not the hon. Gentleman admit that the private sector is still in decline, as it was under the Conservative Government which preceded the last Labour Government? The rosy picture that he is painting of the Government's actions is far from true. Why does not he admit that the Government have built fewer houses than any Government since 1924?
Under this Government mortgage interest rates rose to their highest level and are only now beginning to drop. Far from the picture being rosy, it has been more difficult for people to buy a house under this Government than under the Labour Government and, indeed, under previous Conservative Administrations as well.

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. I remind the House that the Front-Bench spokesmen hope to reply at 6.15 pm and six hon. Members are trying to catch my eye. Interventions tend to prolong speeches.

Mr. Heddle: I shall draw my remarks to a conclusion and say that Conservative and Labour Members should paint a constructive picture. Unfortunately, the hon. Member for Warrington has not done so. He has peddled the further myth that by building more council houses homelessness will be reduced. The figures do not support that argument.
I shall conclude by making three constructive recommendations. Council house rent arrears are so appallingly high in some areas because, as was mentioned earlier, council tenants have no connection with their landlord. They cannot relate to the town hall. Therefore, I suggest that the rent collector should be brought back, not only to collect rents, but to advise generally on household management and to be a counsellor in times of need and distress.
Local authorities should be given the opportunity to take out insurance policies to cover themselves against defects causes by poor design, construction or materials. They would then be able to take early action to protect their properties and their tenants' interests.
The voluntary housing movement, housing associations and housing societies may have a rather better record as estate managers than do local authorities. Is not that an argument for transferring at least the estate management function—rent collection and the supervision of repairs—from the town hall to the voluntary housing movement? Until the Labour Party stops treating every council estate and tenant as its own electoral fief, put into practice what its housing policy review preached in Government and begins to understand the aims, ambitions and aspirations of ordinary people, it has no right to express its disgust of Government policy towards tenants in the public and private sectors. I hope that the House will overwhelmingly reject the motion.

Mr. John Cartwright: Like the hon. Member for Lichfield and Tamworth (Mr. Heddle), I should like to congratulate the hon. Member for Warrington (Mr. Hoyle) on his choice of subject for debate this afternoon. The hon. Member for Warrington ranged over a much wider area than is covered by the motion. If he will forgive me for saying so, the motion is a somewhat black and white work which seems to suggest that the Government are responsible for every ill that tenants are suffering.
I am willing to agree that the Government's attitude is not all that encouraging for tenants as a group. They certainly give the impression of believing that owner-occupation is inherently good, whereas renting implies a second class status, of which council house renting has the lowest ranking of all. The picture of feather-bedded council tenants being subsidised by hard-working, rate-paying owner-occupiers was always a caricature of the truth. The Government seem determined to reverse the postion by the help that is being given to owner-occupiers as compared with that which goes to council tenants.
I do not want to spend a long time on a negative argument. I do not believe that tenant's problems, whether council or private, are just a matter of Government policies, important though those are. Tenants are affected by their landlord, by his responsiveness to their needs and by his sensitivity to their problems. On such a test, too many local authorities fail. Too many are remote and bureaucratic, collecting rent, as has been said, by computer, failing to answer letters and taking months over comparatively simple repairs.
I make no apology for concentrating my remarks on the local authority sector because that affects many people in Britain. For example, 50 per cent. of my constituents live in local authority housing. I and my authority believe that a powerful case can be made for decentralisation in the management of local authority housing. I do not believe that highly centralised local authority housing departments can manage between 20,000 and 60,000 homes and at the same time provide the sensitive service that tenants need and deserve. That is why I, and Social Democrats generally, are strongly opposed to the municipalisation of private rented property.
I do not want to see local authorities, which are already struggling with housing problems, faced with another burden of a decaying and often dilapidated property in addition to their management problems. A system of local management in council housing, with a local manager in an area office close to the bulk of the tenants for whom he is responsible, would provide the responsive style of management that tenants need and deserve. Such a decentralised manager should have control over the day-to-day repairs—everything but the major repair problems. There should be, as hon. Members have said, the closest possible involvement of tenants in the area management structure.
If we want to attract tenant involvement in the management of estates, we must give them real responsibility, real problems to face and real duties to carry out. Some of the joint tenants and management committees that we have seen in the past have not been well supported by tenants because they turned out to be mere talking shops. If we want proper tenant involvement


we must give joint tenant and management committees power over such things as housing budgets, standards of local services on the estates, and so on.
I agree with the hon. Member for Warrington that we should encourage management and maintenance co-operatives among council tenants. I think that he would accept that that is an easy argument to put forward, but a much more difficult argument to bring to reality. Many tenants simply say that they pay their rent, want the services for which they pay provided for them and would rather the local authority did its job properly than that they should be involved in all the hassle and difficulty of running a co-operative.
I agree, in principle, that the ideal way to organise such involvement would be through a method of management and maintenance co-operatives in which the tenants had control over their destiny and therefore could improve the quality of life on their estates.
The motion speaks of the need to give tenants
equal treatment with private owners".
In one respect local authority tenants are at an obvious disadvantage compared with private owners. I refer to the choice of property. Owner-occupiers have a choice where they live. Council house tenants, whether at the beginning of a tenancy or in a transfer, must go where the local authority tells them to go. The allocation system offers them only one or two choices. If they do not accept an offer they go to the back of the queue. That system of allocation causes resentment amongst tenants.
The allocation system is inefficient. Many properties are left empty for months because of the time that it takes to reallocate a property when it becomes vacant. Delays are caused by dealing wih repairs, and offering it to umpteen different people before it is accepted.
I was staggered to learn from a recent written reply that nearly 33,000 council properties were vacant in the Greater London area on 1 April this year. Between them, 11 inner London boroughs owned 22,000 of those properties. We are all familiar with the properties involved. They are boarded-up month after month because tenants will not take them.
We should introduce an element of do-it-yourself into the allocation system. People should be told what type of property is available to them. They should be allowed to examine vacant property lists and settle where they live for themselves. That would give council tenants greater satisfaction. They do not come out of the ark in neat packages so that they fit neatly into the computerised allocation system. Experiments have taken place. Housing allocation offices should operate more like estate agents.
The question of repairs has loomed large in the debate. I am glad that a tenant's basic right to repair his own home is now recognised. I welcome the commitment by my hon. Friend the Member for Bolton, West (Mrs. Taylor) in the new clause she has tabled to the Housing and Building Control Bill. The Labour Party is not alone in supporting such a reform. The tenants' movement has suggested it for many years. The SDP made a similar proposal in its discussion document on inner city problems published in the summer. The document states:
Tenants who are dissatisfied with repair services should be given the right to call in an outside contractor from an approved list.

There is a measure of agreement across a broad spectrum that tenants are entitled to such support. I welcome the conversion by some members of the Labour Party to the belief that competition with private enterprise can result in a better job for tenants who need repairs to their homes.
Some hon. Members suggest that repair delays on council estates are due to Government cuts. I have no doubt that that is a major factor, but other problems arise from bad organisation. Sometimes three local authority departments are involved. The housing department will receive the basic complaint, the works department has to do the job and sometimes the architect's department is involved. Sometimes outside consultants or contractors are also called in. That takes time and, as the hon. Member for Warrington said, tenants are not usually kept informed. The tenant may have to wait months for the work to be done. That causes frustration. Tenants believe that, since they pay their rent, they are entitled to expect the jobs to be done.
I have heard of constituents having to wait months for rotten window frames to be replaced. They encounter demarcation problems. The man who puts in the window frame is not the man who puts in the glass. When the carpenter leaves a tenant may have to wait weeks or months before the glazier puts the glass in the window. The tenant has to live with hardboard or polythene in the window. There can be further delays before the decorators repaint the window. Such demarcation may have been necessary once, but we can no longer afford it now.
We all know tales of disaster in our constituencies. I shall relate one about an elderly pensioner who was called back from holiday last August by a panic telephone call telling him to go home at once, because his house was on fire. My constituent rushed home to discover that the council's painter and decorator, when burning off the paintwork, had set fire to his bedroom window. The fire brigade prevented the blaze from spreading far, but the council had to board up the bedroom window. It is still boarded up four months later. The council has measured up, but cannot say when the replacement frame will be installed. Such delays cause bitter resentment and frustration.
Mobility is an essential ingredient of any tenants' charter. There are many schemes but few moves. It is easier to transfer a constituent to Australia or Canada than from one London borough to another. Many tenants want to move from inner London to more desirable areas in outer London or the shire counties. They have only an eighteenth storey flat in a multi-storey block to offer and mutual exchanges are not easy to arrange. Insufficient rented housing exists in the outer and rural areas.
A charter must include provision for compensation when tenants improve their homes. Some of my constituents have installed central heating, modernised their kitchen or built a garage in the garden, but when they move they receive not one penny piece in compensation. Sometimes they are billed by the local authority for putting back original fittings, which they have modernised at their own cost. A meaningful tenants' charter must include a compensation system for council tenants who improve their homes.
Council tenants must be given power and involvement. I was shocked by a statistic in another recent written reply about the number of properties in Greater London officially described as difficult to let. The Department of the Environment applies that description to


dwellings which are frequently rejected or accepted very reluctantly even by applicants in urgent housing need.
In Greater London there are about 90,000 such dwellings in the public sector. Between them, 11 inner London boroughs own 68,000 properties described as difficult to let. Such statistics are an appalling indictment of the standards on too many of our council estates.
The tenants usually know the solutions to the problems best. The more we recognise that council tenants have rights and the more power that we give them, the more successful we shall be in removing the stigma of council tenancies and the more we shall do genuinely to improve the quality of life for millions who live on council estates.

Mr. Douglas Hogg: The subject is wide-ranging. The most useful approach by Back Benchers is to focus on one matter which, in their opinion, provides opportunity for change. I suggest that tenants are unfairly treated in one major respect and that my right hon. and hon. Friends can intervene. Tenants have security of possession as a result of the Rent Acts, most recently as a result of the Rent Act 1977.
Many right hon. and hon. Members probably do not know that certain provisions of the Housing Act 1957 deprive tenants of their security of tenure as provided for by the Rent Act 1977. I am referring to the power of local authorities to make demolition and closing orders. Those powers are enshrined in section 16 to 20 of the Housing Act 1957.
A local authority has the power to make a closing or demolition order where it is satisfied that a house is not reasonably fit for human occupation, and, furthermore, that it cannot be put into such a condition at a reasonable cost. When a local authority is satisfied of those facts it makes either a demolition or a closing order. The consequence of such orders is great, because they mean exactly what they say, subject to one important proviso—that the owner may be able to persuade the local authority to revoke the order if he is able to embark upon a satisfactory rehabilitation scheme.
The orders have also a serious effect on tenants because, once a closing or demolition order is made, the tenant has no defence to an action for possession, and the Housing Act 1957 provides that the Rent Acts do not apply to such premises. Thus, when a closing or demolition order is made the tenant is out and he has no defence. The effect of the provision is so great that Parliament has enshrined two safeguards in the Housing Act 1957. Unfortunately, those safeguards do not assist the great majority of tenants.
The first safeguard provided by the Housing Act 1957 against an injustice resulting from such orders is the obligation on the part of the local authority, which is contemplating making such an order, to give notice of that fact to various classes of person. When such a notice is given those classes of person have the right to be heard by the local authority.
The classes of person whom the local authority is obliged to notify are mortgagees, owners and the person entitled to receive the rent. The tenant is the one person who is not told that a closing or demolition order is being contemplated. A fortiori, the tenant has no right to appear before the local authority to object.

Mr. Heddle: I find what my hon. Friend is saying interesting. I had no knowledge of it. Lest the House gains

the wrong impression, will my hon. Friend confirm that the local authority has not just the power, but the duty, to rehouse the tenant whose property is subject to a closing or demolition order, and that in the majority of cases closing or demolition orders arise because of representations made by the tenant?

Mr. Hogg: The answer to the first question is, yes, the local authority has a duty to rehouse. However, the local authority does not always offer the tenant comparable accommodation, and in any case a long-term tenant might not want to move. The answer to the second question, as to whether the original complaint comes from the tenant, is "Sometimes but not always".
The tenant is the one person who does not receive a time-and-place notice, but the injustice goes further than that. Because the effect of the orders is considerable, Parliament has provided that there should be a right of appeal and the appeal procedure is enshrined in section 20 of the Housing Act 1957. It provides that any person aggrieved should have a right to appeal to a county court where the matter is considered afresh. However, section 20(2) limits the class of persons who have the right of appeal and the tenant does not have a right of appeal unless the unexpired portion of his tenancy exceeds three years. Tenants do not have a right of appeal if they are periodic, weekly, monthly, yearly or statutory tenants. A statutory tenant is a contractual tenant who is holding over under the statutory provision. Periodic and statutory tenants form the vast majority of tenants.
Closing or demolition orders are methods whereby tenants are excluded as they have no defence to a claim for possession of premises. A tenant who is affected is never informed that the local authority is contemplating an order, and he has no right to make representations or to appeal. That could be bad enough if landlords were always fair and reasonable people. What happens if the landlord is not a fair and reasonable person and has recognised that the interplay of those two statutes gives him a unique opportunity to secure possession of the premises? If the landlord incites the local authority to make a closing or demolition order, acquiesces in it, and the local authority makes the order, the landlord takes possession proceedings. There is no defence. The tenant is evicted. The landlord takes possession. He rehabilitates the property and sells it with vacant possession.

Mr. Robert Edwards: Is that done frequently?

Mr. Hogg: I am not able to quantify the number, but I know of cases when it has been done. If it can be done, I wager that it is done frequently. Some unfair landlords can gain possession of property by using a procedure that was never contemplated for that purpose. It is a use of an unfair position which has existed since 1957. It could he put right easily in two ways, firstly, by amending section 16 of the Housing Act 1957 so that tenants must be given notice that the local authority is contemplating making an order and thus, a fortiori, the right to address the local authority. Second, section 20 of the Housing Act 1957 should be amended by repealing subsection (2) to give all tenants the right to appeal to county courts against the making of such orders. The injustice would then be eradicated.
There is no political capital to be made out of the matter. No party is to blame. The position has existed since 1957. It is wrong, and I hope that in due course the House will put it right.

Mr. Joseph Dean: I join hon. Members from both sides of the House in complimenting my hon. Friend the Member for Warrington (Mr. Hoyle) in choosing this subject for debate. It is a while since we had a reasonable debate on housing and the rights of tenants, although the debate has ranged wider than that.
The overwhelming majority of tenants are in the public sector and most of my remarks will be made on their behalf. My hon. Friend the Member for Warrington said that the Government's record on housing construction was the worst since 1924. I believe that their general housing policy is the worst since 1924. They have not increased public sector tenancies by one property, and any increase in the private sector has been minimal.
Since the Government took office council rents have risen by over 120 per cent. That is a much greater rise than for any other vital commodity. The Government are using council tenants in the worst way in their financial experiments. At present, 40 to 50 per cent. of council tenants are in receipt of assistance; the other 50 per cent. are having to bear the main brunt of the Government's rent policies. It may be argued that tenants have the chance to buy, but most of them, with incomes just sufficient for them to pay the full rent, are in no position to buy and never will be.
The hon. Member for Lichfield and Tamworth (Mr. Heddle) spoke of the vital role of housing associations. I was chairman of housing in a large authority and have always been interested in housing. I am aware that charitable housing associations fill an important gap in areas that are particularly stressed, but the associations are being put into the sausage machine. When the Government's present legislation goes through, they will have to dispose of their assets.
Council rents are having to be increased to pay for many things. The hon. Member for Lichfield and Tamworth had a first-class debate on Airey housing. That is another facet of industrial building that is deteriorating. People who have bought the houses will have to spend substantial sums—considerably more than they can afford—to remedy the construction defects.
The Minister gave these people certain guarantees, but hundreds of thousands of council tenants live in Airey houses that are deteriorating. The city of Leeds has over 2,000 Airey houses and it will cost approximately £20 million to remedy the defects. The Minister has made no promises about council houses. He has not told Leeds that he will underwrite a large proportion of the money needed to do these repairs.
All informed opinion states that 500,000 fewer properties are available to let than when the Government took office. When the defective industrialised building is disgorged from the housing stock, I believe that the figure will be nearer 1 million. The Government have failed to grasp the nettle. It has been suggested that £3,000 million is needed to deal with the problem. Will the Government once again say that council tenants must pay?
During an Adjournment debate we discussed property in Leeds. A property in the constituency of my right hon. Friend the Member for Leeds, South (Mr. Rees), consisting of 1,200 units and costing nearly £5 million, was built just over 15 years ago. After paying loan charges for 15 years, £4 million is still owed and the building needs to be demolished.

Mr. Ted Graham: While my hon. Friend is talking of the enormous burden of debt that is likely to fall on council tenants, will he bear in mind the terrible plight of people in new towns? There have been appalling tragedies, particularly in such places as Easington, where bills of £40 million must be met. The Government promise only a small part of the sum needed.

Mr. Dean: That is true. It is a pity that the debate is short and that we do not have anyone from the new towns to take part in it.
Merely to demolish the block in Leeds and carry forward the loan charges will put 22p a week on council house rents for over 40 years. When I led a delegation to the Minister to ask whether Leeds would be given justifiable assistance, he told us to put up the rents.
It is time that the Government ceased their vendetta against council tenants. Most are not tendants by choice. A cross-party decision was made years ago on council housing and many Conservatives believe in council housing, where people should not be punished by high rents.
Where systems have been given full financial approval by the Government and local authorities have had to demolish the properties, the Government should bear the cost and allow the authority additional capital reserves for replacements. It is disgraceful for the Minister to suggest increasing rents.

Mr. Tom Clarke: My hon. Friend speaks eloquently, sincerely and with a greater knowledge than many Tories. May I remind him—

Mr. Deputy Speaker: Order. The hon. Gentleman must not take too long with his intervention. Others are waiting to speak.

Mr. Clarke: I remind my hon. Friend that the Secretary of State for Scotland said recently that rent arrears in the district and island authorities had doubled in the past two years. The Government's policy is not only a failure; it is without mercy.

Mr. Dean: I am grateful to my hon. Friend for raising that point.
The success of a Government's housing policy can be judged by the length of waiting lists and of queues at one's surgery on a Saturday. Waiting lists and the queues at my surgery have escalated considerably. I lay the blame fairly and squarely at the Government's door.

Mr. Sydney Chapman: I am glad to have the opportunity to make a brief speech. I am also grateful to the hon. Member for Warrington (Mr. Hoyle) for raising the subject, although it will come as no surprise to him if I completely dissociate myself from the terms of the motion. I am also pleased to follow the hon. Member for Leeds, West (Mr. Dean), who I know has great experience of housing.
Understandably, the hon. Member for Leeds, West concentrated on the public sector. I should like to


concentrate on the private rented sector and to make a defence, if that is necessary, of the private landlord. I know that to do so will not be popular. The law of political popularity deems that there are more tenants than private landlords and therefore anything Government do to help the tenant, even though it may hinder the landlord, is good for votes.
I am conscious that it is difficult to generalise about the private rented sector. The speech of the hon. Member for Warrington in that regard seemed at best to be a gross over-simplification of the problem and at worst revealed the widespread and inherent prejudice there is against private landlords. The hon. Member for Leeds, West referred to the Government's vendetta against the public sector tenant. The Labour Party's vendetta against the private landlord is more overt.
I agree with the hon. Member for Warrington in one respect—there has been a decline both in the numbers in the private rented sector and in the proportion of the private rented sector within the total housing stock. In 1914, there were 7½ million dwellings in the private rented sector. That represented 88 per cent. of the total housing stock. By 1956, that had been reduced to 5·4 million dwellings, or 36 per cent. of the total housing stock. The most recent figure that I have—for 1978—shows that there are only 1·9 million dwellings in the private rented sector, representing less than 10 per cent. of the total stock.
Part of the reason for that decline is the increase in home ownership and the increase in council house building during this century. But a significant reason for the decline is that there has generally been a gross unfairness, especially in post-war rent legislation, directed against the private landlord.
Successive Governments have done little to stimulate private lettings. Conservative Governments have not done as much as I should like and the Labour Party, in both words and deeds, has positively encouraged the demise of the private rented sector. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) touched on a recent example. He reminded the House of the Socialist commitment to kill off the all-too-modest shorthold tenancy that the present Government introduced.
There are two good reasons why the private rented sector should be encouraged. First, there is a lack of accommodation, to which hon. Members on both sides of the House have referred. That is especially so in London and other conurbations. Surplus accommodation could be provided quickly in large cities if suitable incentives were offered to existing and potential landlords. Secondly, the private landlord is best fitted to provide accommodation, especially for the young and mobile, who do not choose, or initially cannot afford, to own their own homes.
There are many private landlords but quite a high proportion of them are single retired people on extremely modest incomes who have only one property to let. To conjure up visions of the landlord as a Rachman figure—that name has already been used today—is misleading. Moreover, I sincerely believe, however unpopular it may be to say so, that the rent legislation that has been passed by successive Governments is the Achilles heel of British justice. It is loaded so unfairly against the private landlord that it has become self-defeating.
It seems that rent legislation has been devised on the assumption that every private landlord is a rich, villainous exploiter and that every private tenant is a poor, innocent victim. That is not true. It is little wonder that the private

rented sector is dying when a recent Department of the Environment publication showed that private landlords on average, under so-called fair rents, received only a 3 per cent. gross return on their investments.
I have six proposals that I hope that the Government will consider. Some are interrelated. First, I suggest that the Government seriously consider using existing powers under section 143 of the Rent Act 1977 to experiment and to disapply rent regulations in a selected region of Britain to see what happens. It is worth pointing out that the Rent Act 1977 was introduced and passed by the Socialist Government. If the Government are not minded to follow that suggestion, my second proposal is that they might seriously consider, for a trial period and in certain circumstances, that the Rent Acts should not apply to some new lettings henceforth. If they are not minded to do that—I do not see why not—my third proposal is that lettings of rooms by owner-occupiers should be free from all rent controls from now on. That would encourage more spare and surplus accommodation to come on to the market and it would help to reduce waiting lists and homelessness.
My fourth suggestion is that registered rents should be index-linked to inflation and adjusted every 12 months. The hon. Member for Warrington complained because the period of fixing rent reviews had been reduced in the 1980 Act from three to two years. He would soon be complaining if the retirement pension was reviewed only every two years rather than annually. I cannot see, in all conscience and equity, why the private landlord should not have his rents index-linked, irrespective of the level at which they are fixed under the so-called Rent Acts.
My fifth suggestion is that at least part of the tenant's rent should be allowable against tax along the lines of an owner-occupier claiming tax relief on mortgage interest. That would be a fair way of encouraging tenancies and helping tenants. Finally, the rent income of individual private landlords—it is little enough in most cases and is certainly not an adequate return on investment—should be treated in part as earned, and not as investment, income.
While thanking you, Mr. Deputy Speaker, for calling me in a debate which must be of immense interest to you in light of your experience as a Minister, may I express the hope that we can cease the vendetta that I believe successive Governments have waged against private landlords? I hope that it will be recognised that the private landlord has a valuable contribution to make to the housing stock. If any of my proposals are accepted, I believe that they would ameliorate the plight of at least some of the far too many people who are desperately looking for accommodation for their families.

Mr. John Spellar: If housing vendetta there be in British politics and in this House, it is a vendetta by the Conservative Party, which is obsessed with council house tenants and the public sector generally.
I was struck by the suggestion of the hon. Member for Chipping Barnet (Mr. Chapman) that registered rents should be index-linked. The tenants in my constituency would like to have had their rents index-linked over the last two years, because while the retail prices index has gone up 50 per cent., their rents have gone up 202 per cent.—even higher than the national average.

Mr. Chapman: The hon. Gentleman may be right if he takes the last three-and-a-half years, but since 1974 rent increases have not gone above the retail prices index.

Mr. Spellar: Since the Conservative Government came to power there has been a dramatic and massive increase in the rents paid by tenants in my constituency.
The hon. Member for Folkestone and Hythe (Sir A. Costain) persistently referred to housing being rationed. It has always been rationed. The argument is whether it should be rationed according to need, or according to price. Conservative Members seem to be keen on the latter.
My hon. Friend the Member for Warrington (Mr. Hoyle) gave a general outline of the effects on council tenants of recent changes in housing policy and called for equal treatment and fairness. I should like to tell the House of what the general position has meant for tenants in Birmingham, particularly those in the Northfield constituency.
I have already referred to the increase in rents compared with the increase in the RPI. The RPI is heavily weighted by the impact on mortgages. Therefore, the recent reduction in mortgages as a result of the reduction in interest rates has relieved pressure on many of our constituents, but the reduction in the RPI is thereby even more loaded against council house tenants. That is why Labour Members echo the call by my hon. Friend the Member for Warrington for a one-year rent freeze so that we can achieve some sort of balance.
The background to this increase in rents has been a dramatic drop in the Exchequer subsidy. In 1980–81 the subsidy to Birmingham was £45 million. In 1981–82 it fell to £26 million, and, according to the figures for 1982–83, it will drop to £15 million. By next year, Birmingham, like most other housing authorities, will be out of subsidy. That is a massive reduction, which must be borne direct by the residents and rentpayers of Birmingham.
In a recent debate, in reply to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), the Under-Secretary of State said:
Within the funds available nationally for housing, our priority had to be to safeguard capital investment … and thus curb the indiscriminate revenue support".—[Official Report, 21 October 1982; Vol. 29, c. 644.]
Although there are some differences between capital and revenue, that again reflects the Conservative Party's obsession with capital and revenue. In 1982–83, Birmingham will spend £6·73 million on starts. If, however, Birmingham loses £45 million and intends to spend £6·73 million, the argument about diverting money from revenue to capital sounds pretty thin.
The effects of the Government's housing policy are felt not just on the capital side, but on the maintenance side. In 1979–80 Birmingham spent £148 per dwelling on maintenance. It is now spending £217. That is a 46 per cent. increase, but it is well below the dramatic rent increase to which I referred earlier. As a result, repairs are not being carried out and properties are suffering from damp. That is especially true of system built housing.
In the recent debate the Minister made much play of a substantial increase in repairs, but many of those were the result of schemes adopted by the previous Labour administration in Birmingham. Many of those repairs also resulted from a catching-up process, because the

Government's direct labour legislation substantially disrupted local authority direct works departments and the placing of tenders.
Mention has also been made of Airey system houses. On the south side of Birmingham there is a major problem with Smith built houses, for which the Department has said it will not give relief either to council tenants or to people who have bought those properties.
The city of Birmingham will complete only 214 houses in the forthcoming year, of which 190 will be for the elderly and 24 for the disabled. Not one family property will be completed in Birmingham this year, and that will have a massive effect on the 15,000 people on the waiting list.
Much has been said about people living in council flats, and many of them will now be condemned for life to live in those flats. Indeed, the number of points which two or three years ago would have obtained a house is no longer sufficient, and at the same time as no new properties are being built the council is selling the properties that exist—not only properties with sitting tenants, but empty properties as well.
The hon. Member for Woolwich, East (Mr. Cartwright) spoke of do-it-yourself allocations and of potential tenants finding the property. The tenants in my constituency are doing that, but when they contact the housing department they are told "We are sorry, the property may be empty, but it is already in the hands of the estate agents." A large number of empty properties in the city have already been sold, and many others are now in the hands of the estate agents. Therefore, do-it-yourself allocation does not work in Weoley Castle, especially in view of the response from the housing department.
Birmingham is a massive municipal authority with 132,000 properties under its control. I accept the need for devolution and decentralisation of those properties, but, as a result of the recession and Government and council rent policies, 88,000 of those tenants—seven out of 10—are on some form of housing assistance. It is ludicrous to suggest that they should now purchase those properties, especially as Birmingham has more high-rise blocks than any city in Europe.
It is unrealistic to talk of those tenants buying those properties, especially in view of the massive increase in rents. However, that is the attitude of the current housing chairman, who is so pleased that she has raised rent levels above the monthly mortgage repayment that she has written to tenants to that effect. There is, therefore, very little hope for such tenants, and the need for equal treatment is very much in the forefront of our minds.
There has been much talk about the inner cities. As I said in my maiden speech, Northfield is not an inner city constituency. It is among those areas that often suffer from higher deprivation than the inner cities. Such areas usually include an outer ring redevelopment area with massive housing estates, many of which have been system built, where the problems are even greater than in the inner cities.
The hon. Member for Folkestone and Hythe, among others, also referred to good and bad tenants. Many estates now suffer because bad tenants and, indeed, bad citizens are dumped in them. The fact that little control is exercised over such tenants is the result of the decline in the number of rent collectors and the breakdown of our society. Much greater attention must be paid to the problems of bad tenants. The Housing Act 1980 has not helped. Tenants


should not be required to pay massive increases in their costs and rents, while at the same time they are being attacked on ideological grounds by the Government and by Birmingham city council, which reflects the Government's ideology. What I hope for, but do not expect to receive, from the Government is a new deal for council tenants, both nationally and in Birmingham.

Mr. Mark Lennox-Boyd: I had not intended to intervene in the debate, but this morning I received a letter from the director of the Guinness Trust expressing the trust's deep anxiety about the way in which the provisions of the Housing and Building Control Bill might affect charitable housing associations. I declare an interest, in that my family has strong associations with the Guinness Trust. That is why I am so well briefed about the trust's anxiety.
The indignation expressed in the director's letter is surprising and persuasive, coming as it does from someone who has spent many years of his life quietly helping to provide good housing cheaply for others. The Government's decision to affect charitable housing associations in the way provided by the Bill is likely to lead bodies such as the Guinness Trust seriously to consider whether they should ever accept Government funds to supplement their own funds in paying for housing for poor people.
In 1974, when the provisions of the housing association grant were made available to bodies such as the Guinness Trust, many of the diehards—I know them all personally—expressed the fear that if they accepted such funds their independence would be compromised. In the end, the diehards' fears seem to have been proved correct. It is a salutary warning to any individual or body that craves independence never to take money from the Government.
The Government's proposals have led the trustees of the Guinness Trust to do an unusual thing—to join a pressure group called the National Federation of Housing Associations. I know all the people concerned, and that is an unusual and distasteful thing for some of them to do. My hon. Friend the Under-Secretary of State will know some of the people involved, and he may agree with me on that score if nothing else.
I appreciate that the provisions of the Housing and Building Control Bill do not affect all of the Guinness Trust property, but only that part which since 1974 has been constructed with the benefit of housing association grant. I appreciate also that the provisions do not affect that property for which exemptions are provided in the Housing Act by reason of accommodation being provided for the elderly and so on. Amongst all United Kingdom charitable housing associations, in addition to the Guinness Trust and including the trust's property, about 80,000 to 100,000 homes will be affected.
One point of criticism is that trusts such as the Guinness Trust are not Government agencies and the Government have no right to impose retrospective conditions upon them. Such trusts are not in the public domain. They are private owners of property held for the public good. The fact that they have received Government subsidies is not enough to bring them within the orbit of public ownership.
A housing association grant is different from other grants available to private individuals, such as improvement grants, subsidies and tax relief, none of

which is recoverable. However, a housing association grant can, if the Government so wish, be repaid fully through the grant redemption fund.
The legal basis of charities causes considerable anxiety. They have a legal duty to obtain the best possible price for the properties that they sell, in the charities' interests. However, this legislation will require charities to obtain, not the best possible price, but a discounted price. That could establish a dangerous precedent, which may be used as an argument against many charitable institutions held dear by Conservative Members of Parliament and others who support the Conservative cause.
Housing associations are more adversely affected than local authorities—although local authorities have no reason to complain—because, once a property is sold at a discount and the housing association grant repaid, there will be precious little money left to increase the capital funds of the charitable housing association. They will not be in a position similar to local authorities, which can use renewed capital resources to build new houses to replace those that have been sold.
I urge the Government to be careful and not to go quite so far down this road as they intend. There are three areas of housing for rent—public housing owned by public authorities, private housing owned by private individuals and private housing for the public good, which is in the middle. It is private housing, because the charitable institution is both private housing and independent. If we go too far down that path, it will undoubtedly lead to a challenge to private owners. I hope that my hon. Friend the Under-Secretary of State can give us some assurance tonight. If he cannot, I hope that the matter will be reconsidered carefully and that we can look forward to reading about such a reconsideration in the Committee considering the Bill.

Mrs. Ann Taylor: I congratulate my hon. Friend the Member for Warrington (Mr. Hoyle) on his good fortune in obtaining this debate. The House should be grateful to him for his choice of subject. He raised a matter that worries many people. He referred to tenants as the minority, but they are a substantial minority and it is important that we should discuss their problems seriously. My hon. Friend and hon. Members on both sides of the House, including the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd), highlighted the problems that face many tenants, both in the private and the public sectors.
The problems to which hon. Members referred have become much worse during the past three years because of the direct results of Government policies and because of deliberate Government decisions to weaken the position of tenants and harm their interests rather than to protect them. The protection of tenants should be a duty of the Department responsible for housing. That Department should have special regard for the needs of tenants because, by and large, they are the least affluent members of society in that they cannot afford to buy their homes.
I hope that the Under-Secretary of State realises the strong feelings, both outside the House and in this Chamber, about the proposals in the Housing and Building Control Bill. The hon. Member for Morecambe and Lonsdale mentioned some of the problems that we have been trying to explain to Ministers. I hope that the Under-Secretary of State will not ignore the arguments advanced


by the hon. Gentleman tonight. The Bill cuts across charitable law and it is retrospective, because, when housing associations accepted money under the housing association grants, they did not realise the consequences.
I hope that his hon. Friends—the Members for Chipping Barnet (Mr. Chapman), Lichfield and Tamworth (Mr. Heddle) and Chichester (Mr. Nelson)—who are all, like the Minister, members of the Housing and Building Control Bill Committee, will have listened carefully to what the hon. Member for Morecambe and Lonsdale said. Labour Members will pursue those points closely in Committee and will probably quote what he has said today.
One of the reasons why we are debating this subject today—apart from my hon. Friend's good fortune—is that the Government's decisions have made life much worse for those in rented accommodation. One of the Government's first decisions was to halve spending on housing. Unfortunately, the Government are well on target for making such a cut. Housing spending has been reduced considerably. We are now seeing belated crocodile tears about the drop in capital expenditure, but a Government cannot announce cuts as large as those which were announced three years ago and later cry about the impact of those cuts.

Mr. Graham: This Government can.

Mrs. Taylor: The Government's intention to halve spending on housing was wrong, but what is appalling is the way in which the massive cuts have fallen mainly on the poorest sector—on those in rented accommodation who need help most.
We acknowledge that those who buy houses have been hit in the past three years. Although mortgage rats may be falling now, they have been at record levels. But when interest rates rise, so do the subsidies to owner-occupiers. That is not so for tenants. The Government have deliberately ensured that the brunt of all the cuts has had to be borne by tenants, and particularly those in the public sector. Under this Conservative Government, no group of people has been hit harder than the council tenants.
We need only consider rent levels to see one of the most important ways in which the Government have hit council tenants. In April 1979, the average council house rent was £6·40. In April 1982, it was £13·54. Tenants also have to pay £4 or £5 in rates, and many of them have substantial heating costs.
The Government have always said that rents had to be increased because they were low in 1979. It is true that rents formed a smaller proportion of the average income when the Labour Government left office in 1979 than they had in 1974. That is not surprising, as that Government had tried to help those most in need.
Even if rents were slightly lower in 1979 than when the previous Tory Government left office in 1974, we must consider the magnitude of the increases in the past three years. The doubling of council rents in those years has not simply restored rents to their previous high, Tory, level. There have been massive further shifts, and rents as a proportion of income are now higher than they have ever been. That is a clear result of Government directives. Each year the Secretary of State for the Environment has stated by how much rents should be increased, and has forced local authorities to increase them. The Government have

deliberately forced rents up to the highest ever level, both in money terms and as a proportion of income. We should consider, as some of my hon. Friends already have, what tenants have had in return.
Have services to tenants improved? No. Have repairs been carried out more effectively? Certainly not. Have modernisation programmes been accelerated? No, of course not. In many areas, repairs and services have deteriorated, and in some areas they have reached crisis point. As a result of all the pressures that the Government are putting on local authorities, tenants are now paying more and getting less.
In the past few years the general level of subsidies to tenants has fallen dramatically as the level of rents has increased, whereas the subsidy to owner-occupiers has continued to rise. An examination of the balance of subsidy shows that over the past few years council house tenants have suffered considerably. The official Opposition would maintain the level of income tax relief on mortgage payments for those who are paying tax at the standard rate, but we believe that it is unfair to give so much help to those who are buying a capital asset, while penalising those who pay rent week after week for the whole of their lives. The present balance of subsidy is wrong, and the figures show how wrong it is.
In the current year, the subsidy per tenant in the public sector is now running at £287, according to recent answers to parliamentary questions. A person who is buying his own house on mortgage gets, on average, £375 tax relief per year, so the person who is buying a home gets far more subsidy than is received by the person who is living in a council house.
Given the level of rent increases, it is no wonder that the Minister for Housing and Construction was able to boast recently that, after discounts, many tenants would now find it as cheap to buy their homes as to continue renting them. That is the point that my hon. Friend the Member for Birmingham, Northfield (Mr. Spellar) mentioned earlier. Some councils have deliberately forced up rents to such a level that council tenants would be better off buying their own homes. It is all part of the Government's drive towards the sale of council housing, which seems to be the principal objective of their housing policy.
The high rent policy that the Government are now pursuing will raise some awkward questions for the Government in the long run, and eventually Ministers will have to answer them. Already this year about 100 councils are transferring housing surpluses to subsidise their rate fund—in other words, council tenants are paying to keep the rates down.
The case of east Cambridgeshire, which has had a great deal of publicity, is becoming well known. It now gets more income from profit on its council house rents than from its entire rate bill, both business and domestic. I do not want to dwell on that case because the finances in east Cambridgeshire are somewhat exceptional, but there are other authorities which are also making a profit out of their housing revenue account.
The Minister for Housing and Construction is with us this evening. This year the Tonbridge and Mailing district council, in his own constituency, is transferring £861,000 of profit from its housing revenue account to the rate fund. The Secretary of State for the Environment represents an area in south Oxfordshire. The council there is transferring £481,000 worth of profit from its housing revenue account


to subsidise the general rate fund. Those examples may be somewhat exceptional but I think that more authorities will be placed in that position next year and in future years, and council house tenants will increasingly be subsidising the general rate fund.
I am told that computer runs that have been done by the Department of the Environment show that if there is a £1 rent increase next April, not just 100, but 308 out of 367 local authorities will go into surplus on their housing revenue accounts. Therefore, in all those councils the general rate fund will be subsidised by profits that are being made out of council house tenants. That is unacceptable. I should like to know how the Government justify that. We have had no assurances from Ministers that that situation will not continue and worsen. When they talk about council house tenants being subsidised they should bear in mind how much subsidy council house tenants pay to everyone else. The least affluent people in our society are subsidising the general ratepayers.

Mr. Joseph Dean: The figures that my right hon. Friend has quoted are a revelation. Does not that mean that the people who are meeting the full charge of their rent—just over 50 per cent.—are supplying the subsidy to the ratepayers?

Mrs. Taylor: My hon. Friend is right. Because of the general level of rent increases and the increased incidence of unemployment, more people have to claim some kind of rebate. That means that the tenants who are paying the full amount of rent—the unrebated rent—are subsidising everyone else and carrying the full burden of all the increases that the Government have been making.
I hope that in future when Conservative Members speak about council house tenants they will acknowledge both that those tenants pay so much in subsidies to other tenants who receive rebates, and, more importantly and increasingly, that they are subsidising the general rate fund. I wish that Conservative Members would acknowledge that. I do not expect them to explain it, but I wish that they would acknowledge it.
My hon. Friend the Member for Warrington mentioned some of the things that were necessary to help tenants out of this situation. He mentioned a rent freeze and a better deal on repairs and services. The Opposition are committed to those things. It is essential for us to change people's attitudes to council tenants and acknowledge the need for equality of subsidy and of status. Conservative Members should stop talking about council house tenants as subsidised people.
My hon. Friend also mentioned the private rented sector. Nothing effective has been done to alleviate the problem of that sector, which contains some of the worst housing and some of the poorest households in the country. We have heard mention of the rapid decline of the private rented sector. It is true that that sector has declined recently. I hope that it will decline more in future.

Mr. Heddle: No.

Mrs. Taylor: I said that I hoped that the private rented sector would decline more in future. There is no way in which the interests of the private landlord and a fair deal for the tenant can be reconciled. The fact that that sector is bound to decline in future does not mean that we can ignore the difficulties of the 2 million households that remain in the private rented sector. Everyone knows that

some of the worst housing is in the private rented sector. The recently commissioned survey by the Department of the Environment in Sheffield proved that many houses in the private rented sector lack basic amenities. We all recognise that major disrepair is a significant problem in the private rented sector.

Mr. Chapman: Of course, there is property in a serious state of disrepair in the private rented sector, but not all such property is in that sector. Is the hon. Lady saying that, because some such property is in the private rented sector, that sector should be finished?

Mrs. Taylor: No. Perhaps the hon. Gentleman misunderstood me. I acknowledge that there is poor property in other sectors. The private rented sector has a disproportionate amount of poor property. That sector has no long-term future, not because of the condition of the property, although that is one factor, but because the landlord's need for profit and the tenant's need for decent housing at a reasonable level of rent cannot be reconciled.
The Government have blamed the decline on the Rent Acts. That was one of the points that the hon. Member for Chipping Barnet mentioned. He should look at the Select Committee on the Environment's report on private rented property. It is not the Rent Acts or the present security of tenure that put off private landlords. The Committee's evidence shows that, especially in areas such as London, a high proportion of landlords know their way round the Rent Acts. Bogus holiday lets show how easy it is for people to abuse the Rent Acts.
One of the reasons why shortholds have proved to be such a failure is not, as hon. Members would have us believe—and which I wish was the case—that my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) has the power to say that, because we shall repeal them, no one will take them on now. His powers may be persuasive and some people may not go into shortholds because of that, but there are many other ways of getting round the Rent Acts. People have found other dodges. Many of them do not require shortholds to abuse the system in the private rented sector.
All of us in the Opposition could give the Minister many examples of abuse in the private sector. Recently there was a court case when a letting was claimed to be furnished because there was a charge of £1·25 for the use of the linoleum. Such abuse in the private sector is rife. Conservative Members have not mentioned it. The next Labour Government intend to tackle that abuse so that all the present loopholes can be closed.

Mr. Hoyle: Does my hon. Friend agree that her points and the points that have been made by Opposition Members need a reply from the Minister?

Mrs. Taylor: Yes. I hope that the Minister will reply to our points. I suspect that this is what my hon. Friend is getting at. I doubt whether the reply will be adequate. The Government do not realise the full consequences of their action. The Government cannot decide to cut spending on housing in half and expect to have no problems. They cannot pretend that all their so-called new initiatives make up a housing policy.
My hon. Friend and others have shown today that tenants in the private and public sectors have had a raw deal from the Government. They have been treated as second-class citizens. The Government have waged a


vendetta against tenants. If the Government will not give equal treatment to tenants by supporting my hon. Friend's motion, tenants can have no hope of any help from the Government and they can only look forward to a change in Government, which will give them a better deal.

The Under-Secretary of State for the Environment (Sir George Young): The Government very much welcome the opportunity that the motion tabled by the hon. Member for Warrington (Mr. Hoyle) provides to set out the substantial progress that the Government have made to improve the lot of tenants and to widen their housing expectations. Our policies are based, not on the paternalism of many Opposition Members, but on enfanchising the tenant where possible and giving him a greater say in the management and control of his environment. Our policies are much more in tune with what tenants want than are those of Opposition Members.
The motion begins by calling attention to tenants' rights. I shall remind the House of the rights given to public sector tenants by the Government in the Housing Act 1980. Before that measure was passed, security of tenure was a matter of great concern to public sector tenants. The scales were balanced heavily in favour of public sector landlords when they acted to terminate tenancies and obtain possession orders. Tenants had a limited defence against such action. Landlords could seek and obtain possession orders based on the flimsiest of reasons and, in theory, without giving any reason. In creating secure tenancies and limiting the grounds on which the court may order possession, a proper balance between landlord and tenant has been achieved and the ability for a tenant to challenge his landlord in a possession case before the court has been established.
Until the passing of the Housing Act 1980, the right of a tenant's family to succeed to the tenancy on the death of the tenant did not exist. It was left to the discretion and decision of the public sector landlord, and on occasion the family of the tenant, who might have been born in the house and lived there all their lives, faced eviction or transfer to some other house or flat because there was no right of succession. The right of succession now exists as part of the Government's tenants' charter.
The charter predates this Parliament. The Conservative Party attempted to introduce such a charter when it was in Opposition. My hon. Friend the Member for Birmingham, Hall Green (Mr. Eyre), who is now the Under-Secretary of State for Transport, introduced a Bill on 1 March 1977. It received its Second Reading on 13 May of that year. I happened to take part in the debate, and perhaps I shall be forgiven for quoting the final three sentences of my remarks. I said:
I gather from listening to speeches made by Labour Members that some of them are minded to oppose the Bill. If so, that will be bitterly resented by millions of council tenants throughout the country, who will rightly interpret such opposition as resistance to giving them a greater say in how they manage their affairs. The Labour Party has problems enough on council estates without being further handicapped by an intransigent and paternalistic approach, which is what would happen if Labour Members voted against the Bill."—[Official Report, 13 May 1977; Vol. 931, c. 1801.]
That is exactly what they did and the Bill was defeated.
The Housing Act 1980 put the charter on the statute book. The right to take in lodgers was also established, and

provision for sub-letting with a landlord's consent has been created. Before the passing of the 1980 Act it was apparent that a tenant's freedom to carry out improvements to his own dwelling, even to the limited extent of painting his front door, was limited by pettifogging restrictions that were insisted upon by the landlord. The right of a tenant to carry out improvements to his home and for consent not to be unreasonably withheld by his landlord was also established, together with the right of access to improvement grants.
An examination of tenancy agreements revealed a pretty sorry state of affairs. These were agreements of a sort that had not been reviewed for many years. They were riddled with restrictions on tenants and their families. Some had rules about times of the day when sticks could be chopped to light the fire—perhaps 15 years after the house had been converted to gas central heating. We introduced a right for tenants to be provided with information about secure tenancies and a written statement on the terms of such tenancies. My hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) mentioned many of the other tenants' rights that were introduced in the 1980 Act. The Act has been a major contribution in improving public sector tenants' standing, changing landlord-tenant relationships and improving tenants' freedom.
In many minds the most important tenant's right is that of the right to buy. Not once in a 25-minute speech did the hon. Member for Bolton, West (Mrs. Taylor) mention the right to buy, which in the view of most hon. Members is the most significant right that tenants have been given this century.
The Government have done more than any previous Administration to recognise the desire for home ownership and to enable people to realise that ambition. Our policies have been given further impetus by our success in reducing mortgage interest rates to their lowest level since November 1978. We have given local authority tenants, new town tenants and certain housing association tenants the right to buy their homes at discounted prices. We have given them a right of access to mortgage finance to ensure that their right to buy is a reality and not an empty promise. In doing this we were honouring a major manifesto pledge.
The response has been truly remarkable. We estimate that by 30 September about 425,000 tenants of local authorities, new towns and housing associations in Great Britain had bought their houses since the Government were elected, either by means of the right to buy or through voluntary sales. This is a massive response and a vindication of the Government's policies. Other parties may theorise about equality and the redistribution of wealth, but the Government are doing something about it. The spread of home ownership has been the one most important factor in extending wealth holding over the past 30 years, and our policies will give that trend a fresh impetus.
There are wider benefits, too, besides those for the individual purchaser. There is evidence that on the whole owner-occupied houses are better maintained, age for age, than are houses rented from either private or public landlords. There is normally a greater ease of mobility in the owner-occupied sector, though we are taking steps to improve it in the public sector. There are social advantages in mixing forms of tenure rather than having areas of cities consisting of nothing but council housing. For the local


authorities there are the capital receipts that they obtain from sales, 50 per cent. of which can be used directly to supplement their housing investment allocation.
On this, the most important right that any tenant can have, the Labour Party has pronounced. The hon. Member for Bolton, West, when she addressed the House on the Housing and Building Control Bill's Second Reading, said:
I am happy to tell the Secretary of State that we are committed to the repeal of the right to buy. We shall say so in our election manifesto."—[Official Report, 23 November 1982; Vol. 32, c. 730.]
The Labour Party has done nothing over the past three and a half years. It has learned nothing from the large swings to the Conservative Party in the new towns, in places such as Birmingham, Northfield and in the large estates on the outside of London which have been run by Labour authorities. In a desperate attempt to turn back the clock, it is revealing that it is out of touch with what ordinary people want.

Mr. John Spellar: It was the swing from the Conservatives in Northfield that led to me replacing a Conservative.

Mr. Peter Bottomley: Come off it, John.

Sir George Young: The largest swing to the Conservative Party in the May 1979 election occurred in Northfield, a constituency in which there are many tenants who are greatly attracted by the Government's right-to-buy policy. The hon. Gentleman should watch out for his prospects at the next general election if he endorses his party's policy on denying tenants the right to buy.
Some hon. Members have talked about repairs. My hon. Friend the Minister for Housing and Construction has today answered a parliamentary question that was tabled by my hon. Friend the Member for Reading, North (Mr. Durant), in which he commends local authorities on the imaginative scheme which has been established by the London borough of Havering, in which tenants' rent accounts are credited in respect of repairs that they do for themselves. If new clause 1 is reached in our consideration of the Housing and Building Control Bill in Committee, we shall be dealing with that in a Government measure.
The Housing and Building Control Bill, which my right hon. Friend the Secretary of State introduced last month, extends the right to buy in three ways. First, it includes significant groups of tenants who remained outside the entitlement that was granted by the 1980 Act as well as those who have not been able to afford to exercise their right to purchase their homes outright. It brings within the scope of the right to buy 50,000 secure tenants of local authorities, new towns and housing associations whose landlords do not own the freeholds of their dwellings but who would otherwise qualify under the terms of the 1980 Act. These tenants will be given the right to buy the lease of their homes provided that their landlords' interest in the property is sufficient to grant a lease of not less than 22 years for a house and not less than 50 years for a flat.
I know that these developments will be of interest to tenants in Bolton. My Department received the following letter from someone who lives in Victory Road, Bolton:
Recently I applied to buy the house, but my application was turned down by the Council which is Labour-controlled, on the grounds that they do not own the freehold. I am not satisfied with this, as the house adjoining to mine is under the process of being

bought, and it is only since the Council became Labour-controlled that these weak excuses have been given. I have spoken to our local Conservative councillor Mrs. Millicent Lawton and she has advised me to write to you, as our local MP is Labour. I am quite prepared to buy the freehold if it is available for sale, but on enquiries to our town hall no one will tell me who owned the land … Please could you help or advise me because I want to fight the decision of the Council.
Help is on the way through the Housing and Building and Control Bill.

Mrs. Ann Taylor: Will the Minister acknowledge that he can talk about tenants getting out of the tenanted sector and trying to buy their own housing only because the Government are offering them nothing and giving them a raw deal as tenants?

Sir George Young: I outlined at the beginning of my remarks the tenants' charter, which Labour Members voted down when they were in Government. Although they said that they would introduce a charter, there was nothing on the statute book by 1979. If the hon. Member for Bolton, West provokes me any more, I shall read out more letters from others of her constituents who are dissatisfied with her representation of them in the House.
Secondly, we are extending the right to buy to about 80,000 tenants of charitable housing associations and trusts whose homes have been provided wholly or substantially from public funds. We believe that it is unfair to deny the opportunity—perhaps the only chance that they will have to buy a home—to tenants of dwellings that have been provided out of public money and that are directly compatible with the housing stock of other housing authorities and non-charitable housing associations.
My hon. Friend the Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) made clear his reservations, and my hon. Friend the Minister for Housing and Construction hopes shortly to make a speech on this topic in Committee. I am sure that he will take on board the anxieties expressed by my hon. Friend.
Thirdly, we are creating a new right to shared ownership. Many thousands of tenants, who have the right to buy but who cannot afford to buy their homes outright, will be given the opportunity to purchase an initial share of not less than 50 per cent., while continuing to pay rent on the outstanding share. They will then be able to proceed to full ownership whenever they wish by buying further shares in 12½ per cent. slices. In this way many tenants will be given a chance to get a firm foothold on the home ownership ladder, taking on the full financial commitment as time and resources allow.
As well as these three major extensions of the right to buy, we are taking the opportunity in the Bill to help those who are already seeking to exercise their right to buy by removing various uncertainties and anomalies and by dismantling the several obstacles which a narrow-minded minority of landlords have sought to throw up in the path of claimants, in the desperate attempt to deny them their legal entitlement.
The Government have also initiated a large number of low-cost home ownership schemes to try to take home ownership further down the lower income scale. We have promoted a six-point low-cost home ownership programme. I am happy to say that since we came to office more than 19,000 families have become home owners through one or other of these measures. Many of them would not otherwise have had such an opportunity.

Mr. Joseph Dean: In the few minutes that the Minister has left, will he answer some of the points raised by Labour Members instead of merely answering the points raised by his hon. Friends?

Sir George Young: A large number of Labour Members made suggestions about the private rented sector, with which I shall now deal. If I have time later I shall try to deal with some of the matters that the hon. Gentleman raised on Airey houses and some of the points that he made about Leeds.
The motion calls on the House to express disgust at the Government's treatment of tenants in the private rented sector. No treatment can have been more appalling than that dished out by the Labour Party, whose antagonism towards this sector of the housing market is clearly on record, and whose Rent Acts, by deterring landlords from letting, led to a decline in the role of the private rented sector in meeting housing need. My hon. Friend the Member for Chipping Barnet (Mr. Chapman) made this point in an intervention.
In the Housng Act 1980 the Government took a number of measures to make more privately rented accommodation available. If there is to be any disgust expressed, it should be at the Opposition's efforts to hamper the full effect of these initiatives by threatening to repeal shorthold. The 1980 Act also introduced a whole host of improvements to the rights of private sector tenants.
The hon. Member for Warrington advocated municipalisation of private rented stock, and from a sedentary position the right hon. Member for Manchester, Ardwick (Mr. Kaufman) indicated his assent. Do they propose to confiscate the property, or will they compensate the people from whom they take it? If so, that will involve them in a substantial amount of public expenditure, for no housing gains. It will provide no jobs and no new homes for tenants. If there is one sure way of drying up possible extra investment in housing from the private sector, it is to issue the threat of municipalisation, which will be bad for jobs and tenants. My hon. Friend the Member for Folkestone and Hythe (Sir A. Costain) made this point.
One or two Labour Members have been talking about figures and have endeavoured to show that the Government have been favouring the home owner at the expense of the tenant in the assistance that they give. It is of course all too easy to allow oneself to be deceived by the comparisons made and the numbers quoted. It has long been recognised that there are many contentious items which some would include and others would exclude in this particular numbers game.
The last Labour Government in their Green Paper on housing warned all those attempting the comparison of assistance to home owners and local authority tenants:
There is no objective basis for deciding these questions".
No doubt this advice will temper the certainty with which Labour Members announce their conclusion to the matter.
If one takes account of the various forms of assistance for housing, costs coming from the public purse, inclusive of supplementary benefit, the figure for the average tenant household is about £485 per annum, and that for the average owner-occupier household £205 per annum—[Interruption.] These figures are not nonsense, they are the truth.
I hope that this removes any misapprehension that the Government are directing a disproportionate amount of

their assistance away from tenants toward owner-occupiers. Tax relief on mortgage interest payments is widely recognised as a most effective means of encouraging and supporting home ownership. I am glad of the opportunity therefore to repeat the assurances given by my right hon. Friend the Prime Minister that there is no truth whatever in reports that this Government are considering the abolition of tax relief on mortgage interest, and that there will not be any truth in it as long as she remains First Lord of the Treasury.
One or two hon. Members spoke about council house rents in such a way as to suggest that they had not been charged before we took office. We are now familiar with the tactics employed by Labour Members. They point to the increases in council house rents over the past three years and conveniently ignore what happened beforehand. That is hardly surprising, for the last Labour Government professed a policy of rents moving broadly in line with money incomes. In practice, they allowed rents to fall well behind. That was the position that the Government took over. As a result of rent increases since we took office, rents in relation to earnings are now at about the same level as that which the last Labour Government inherited from us. We have done the job that they said they would do.
In the previous Labour Government the policy set out by the Chief Secretary to the Treasury was summed up by this:
I believe that we are right to plan in the longer term for the proportion of housing costs to be borne by rents to grow from 43 per cent. in 1976–77 to 50 per cent. by 1980."—[Official Report, 10 March 1976; Vol. 907, c. 453.]
However, by 1979–80 the position inherited by this Government was that rents on the basis that he used accounted for only 38 per cent. of costs. My hon. Friend the Member for Grantham (Mr. Hogg) raised a rather upmarket point about the Housing Act 1957, but it is probably best if I try to deal with this point in writing.
With regard to Airey houses in Leeds, the Government will take into account the costs that Leeds will have to bear to put it right when they come to calculate the HIP allocations of the years in which the expenditure will fall.
Perhaps I can write to my hon. Friend the Member for Chipping Barnet in response to his four suggestions.
The hon. Member for Wolverhampton, South-East (Mr. Edwards) urged the Government to adopt an imaginative approach to the problems and called for partnership. The last example of this that I should like to give is what the Government are doing on the Cantril Farm estate in Merseyside. This is a major experiment that can demonstrate a new way to rescue severely rundown council housing estates.
The problems of Cantril Farm are rooted in its poor design. Vandalism has grown, some families have drifted between empty flats, rent collection has become difficult and arrears have grown alarmingly. Our approach to this is to set up a trust involving private developers, local tenants and the local authority to try to tackle these problems with the benefit of public and private investment. We have been enormously encouraged by the response of tenants on the estate to this new solution. A major programme of housing and repair will be executed by the trust, but it will be related to environmental schemes aimed at creating a more attractive and secure environment.
I hope that I have said enough today to demonstrate that the welfare of tenants has been, and will remain, one of the principal concerns of the Government's housing policy. Our record of achievement so far is one of which we can be proud. Few Governments can claim to have done so much to improve the well-being of tenants, expand the range of housing opportunities before them, and give them a say in the management and maintenance of their environment.
The only right that Labour Members appear to be interested in is the alleged right of a tenant to remain a local authority tenant, often against his will, in a property run by a remote, paternalist authority. That is a philosophy that the Conservative Party decisively rejects.

Mr. Hoyle: I thank all hon. Members on both sides of the House who joined the debate. It has been an interesting debate, and I am only sorry that the Minister did not see fit to reply in a constructive way. He did not allay the fears of tenants. What I gathered from his remarks shows that I am right and that the vendetta will continue. Nothing that the Minister said will enable tenants to hope that they will get a fair deal. He could only concentrate on the selling of houses, which will not solve the problem.
However, it was right to air this problem today. The fact that we have had this debate was in itself well worthwhile. But, since we have had the debate, I hope only that the Government will allow time for a longer one. In view of that, I beg to ask leave to withdraw the motion.

Motion, by leave, withdrawn.

Orders of the Day — Electricity (Financial Provisions) (Scotland) Bill

Considered in Committee

[MR. PAUL DEAN in the Chair]

Clause 1

BORROWING POWERS OF SCOTTISH ELECTRICITY BOARDS

Motion made, and Question proposed, That the clause stand part of the Bill.

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The Second Deputy Chairman of Ways and Means: With this motion we are to discuss new clause 1—Disconnection of electricity supply—
Part of the increased borrowing powers referred to in section 1 shall be used by the Scottish electricity boards to avoid disconnections of electricity supply to households where such disconnection would result in hardship.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): The purpose of the clause is to increase the statutory limit on borrowing of the Scottish electricity boards from £1,950 million to £2,700 million, with an interim figure of £2,300 million. As in the past, these limits have been fixed to meet the boards' needs for periods of about three years at a time, and the interim figure is subject to an affirmative resolution of the House.
The boards' capital investment programmes must be approved by my right hon. Friend the Secretary of State for Scotland, and his specific consent is required before expenditure is incurred on any new power station. All borrowing requires his consent and the approval of the Treasury.

Mr. Dennis Canavan: On Second Reading the Minister said that the increased borrowing powers referred to in the clause would be largely used up by the Torness power station, and he gave me a figure for the total budget for the power station of £1,097 million. But, of course, that figure is based on March 1980 prices, and obviously it must be updated. Hon. Members on both sides of the Committee will agree that that is a very large sum of money to be spending on one nuclear power station.
It so happens that on Friday of last week, between Second Reading and this debate, I and some of my colleagues in the Scottish parliamentary Labour group had an opportunity to visit Torness, where we discussed the project with the chairman of the South of Scotland electricity board and some of his colleagues. To be fair, I think that anyone who has visited the site must be impressed by what will be a tremendous achievement of science and engineering. But I could not help thinking of the great assistance that could be provided to many consumers of electricity in Scotland if even a fraction of the sum being spent on Torness power station was used to assist consumers either with their electricity bills or by way of lower prices for electricity or, indeed, by introducing a massive programme of home insulation in


both the public and private sectors, which would have the useful by-product of providing jobs for many unemployed construction workers. Unfortunately, because of cuts in public expenditure, we are not seeing a home insulation programme of the size that we ought to have in Scotland.
Even before Torness is completed, there is an overcapacity of generation in Scotland, and the Minister has not explained adequately the Government's priorities on expenditure or how all the increased public expenditure referred to in clause 1 will be used. In the new clause I suggest that at least some of the increased expenditure proposed should be used to help the many families who have been disconnected or threatened with the disconnection of their electricity supply. It is a widespread problem in Scotland which is causing a great deal of hardship and misery, and the Government seem to be doing little if anything about it. I raised these matters on Second Reading. I did not get an adequate reply from the Minister, and I am grateful for the opportunity to discuss them in this debate.
To those hon. Members who thought that I was exaggerating about the extent of the problem in Scotland it must be pointed out that the rate of disconnection in the area of the South of Scotland electricity board alone is running at about 1,000 a month. I understand that the corresponding figure for the North of Scotland hydro-electric board is about 260 per month.

Mr. Norman Hogg: I am sure that my hon. Friend will agree that the figure for the North of Scotland hydro-electric board is significant when account is taken of the fact that that board provides electricity for only 2 per cent. of the nation's consumers. That makes it a high figure.

Mr. Canavan: My hon. Friend is right. We have to look at the figures in terms of the populations in the areas concerned and the number of electricity consumers there. I shall come later to a comparison between the Scottish boards and what is happening south of the border.
The number of households disconnected at any time in Scotland is considerably higher than the figures I quoted. The earlier figures related to the number of disconnections per month. To give an idea of the number of families remaining disconnected, I can tell the House that during December of last year 3,700 families remained disconnected during the coldest recorded winter this century. Of those, 80 per cent. had been without a supply for a month or more. The Policy Studies Institute pointed out that 90 per cent. of those disconnected were mentioned specifically in the code of practice but that, despite the existence of the code of practice, there appeared to be no real protection for many of those families. I know that the Government pay lip service to the code of practice and have even tried amending it to produce what they describe as slight improvements. However, the problem remains, despite the alterations in the code.
I have in my possession one of the most recent leaflets on the subject. It is quite a good one. It is fairly understandable. Some leaflets issued by the Civil Service and public corporations are difficult for ordinary people to understand. This one is fairly clear. But I suggest that some people reading it may be given a false sense of security.
Some of the categories in the code of practice include people receiving supplementary benefit or unemployment benefit. It also includes cases where
all the people in the house are Old Age Pensioners".
It also includes people who are
blind, severely sick or disabled",
and cases where there are
children under 11 years old
or where people in the house are receiving family income supplement. Those are all very deserving categories. They include people who are suffering from some disability, or people who are suffering financial hardship. Nevertheless, as I said, 90 per cent. of the people disconnected fell into the categories which were specifically mentioned in the code. Therefore, the code is hopelessly inadequate, and it is up to the Government to take much firmer measures, and to take them urgently, to deal with the problem of fuel poverty.

Mr. Russell Johnston: I am not sure what the hon. Member's criticisms of the leaflet are. He told us what was in the leaflet, but he did not tell us his objections to it.

Mr. Canavan: The leaflet says that it is "a code of practice". People looking through it may see that they fall into a special category and therefore assume that they will get protection. I shall come to specific cases later. There is nothing wrong with the leaflet in itself, but the code of practice should be toughened up and, if necessary, statutory protection should be given to the categories of people which are mentioned in the leaflet.
I am told that about 30,000 people are at present on the fuel direct scheme in the South of Scotland electricity board area alone. That, too, shows the difficulty that many families on low income now face in trying to pay their electricity bills. Those families have opted for, or been advised to go for, the scheme whereby their fuel is paid directly by the Department of Health and Social Security, by deductions from their benefits. It shows, too, the difficulties that many people are facing as a result of the escalating price of electricity. Since 1974, electricity prices have increased about four and a half times. Of course, the Minister will tell us that many other things have increased since 1974. However, even taking inflation into account, I am informed that electricity costs 47 per cent. more in real terms than it did eight years ago.
I come now to the comparison that I mentioned earlier between Scotland and England. It takes 20 per cent. more fuel to heat a house in Glasgow that it does to heat a similar house in the south of England. In the north of Scotland—for example, in Aberdeen—it takes 30 per cent. more fuel to heat a house than in the south of England. Clearly, for climatic reasons, the average consumption in Scotland is much higher. It works out at 5,500 units per annum in the South of Scotland electricity board area and 6,500 units per annum in the North of Scotland hydro-electric board area, whereas in England the average is only 4,000 units per annum. Thus, Scottish consumers have to burn more electricity to be reasonably comfortable in their homes, although there seems to be no Government compensation for the more extreme climatic conditions that exist in Scotland. It is not surprising, therefore, that the number of disconnections in Scotland is considerably higher than in most of the English areas.

Mr. William McKelvey: It may assist my hon. Friend to realise that I wrote to the Minister about the climatic differences between England and Scotland and received a reply saying that there was no difference.

Mr. Canavan: That is typical of the Minister. When he gets off the plane in Scotland, he does not seem to realise that it is a bit colder. However, perhaps he is so thick-skinned that he does not realise the difference. One does not need a thermometer to realise the difference.
I was speaking about the percentage of domestic consumers who had been disconnected. Unfortunately, I do not have the most up-to-date figures for the breakdown. The figures that I have are for 31 March 1981. They showed, that the percentage of disconnections in the SSEB area was ·55, the North of Scotland hydro-electric board area was ·49, whereas for the North-East of England the figure was ·28, the North-West ·27, South Wales ·29, the South-West ·18, the Southern area ·13, and the South-East ·16. So there are significant differences in the proportion of homes that have been disconnected in Scotland compared with south of the border. Unfortunately, my figures are not as up-to-date as I should like. I hope, therefore, that the Minister will give us the up-to-date figures to see whether the situation has improved.
I come now to some individual cases. On Second Reading last week I mentioned the case of a single parent in my constituency, with a young child, whose electricity had been disconnected. She came to see me and I managed to get the electricity reconnected later the same day. Why should people have to come to Members of Parliament? I do not mind helping constituents who are in difficulties, but it shows that there is something wrong with the system. In that instance, there had been a breakdown in communications between the statutory authorities, and I managed, through the fuel direct scheme, and so on, to get an arrangement to repay the debt by instalments. I suggest that it is often against the interests of the electricity boards to disconnect customers. It would often be more in the boards' interests to reach some agreement with the consumers to get debts repaid in instalments. Through lack of communications, often someone appears, armed with a piece of paper, and has authority to break down the door if the person is not in. There is something wrong with the system if that can happen. A local authority would not be allowed to treat its tenants in that way. We debated tenants' rights earlier this evening.

Mr. Tim Eggar: How many times has the electricity board normally tried to contact the non-payer before such action is taken?

Mr. Canavan: The electricity board would have the best people to answer that question.
I shall give some instances of disconnections. There are warning notices, and so on, but they may go astray or be misinterpreted. Sometimes people are so terrified that they are unwilling to tell the people in authority that they do not have the money to pay the bill. Many people are so poverty stricken that they are ashamed of it, and that is part of the problem.
In the recent case that I have just mentioned concerning my constituent I was able to have the electricity supply switched on again. However, there was no need to switch off the supply in the first place. The very fact that the board

switched it on again at my intervention seems to show that at one level it agreed with me although at another level a man went out to disconnect the supply on the instructions of someone within the board.
That case is by no means unique. Strathclyde regional council gave me some similar documented cases which had been passed to it by its social work department. One was of a Mr. X, a landlord with four sub-tenants, operating a prepayment meter for their electricity supply. A bill of £770 accrued but Mr. X could not be found. The supply was disconnected in breach of the code leaving three pensioners and one student without lighting or electrical facilities. One pensioner died before the supply was reconnected on the Tuesday, following the Friday disconnection. The supply was reconnected when the attention of the SSEB was drawn to the fact that a new code of practice had been issued which prevented the disconnection of tenants for a landlord's debts.
Another case was of a Mrs. E, a recovering alcoholic. With social worker's support she intended to re-establish her family home after its disconnection for two years. She applied for a prepayment meter with suitable calibration in order to pay back the arrears but was told that she must pay £100 before it could be connected. She could not afford £100 so she did not get her prepayment meter.
The SSEB seems reluctant to install prepayment meters. We hear of it refusing to give prepayment meters in areas which it considers to be a bad risk because it is afraid that the house will be broken into and the money stolen. What right has the SSEB or the North of Scotland hydro-electric board to discriminate against tenants just because they live in a particular area? It would be in the better interests of the electricity boards if they could accommodate their consumer's choice of prepayment meters. I know of several cases in my constituency of people who are now managing to pay off debts by using suitably calibrated prepayment meters.
I want to deal with some of the options that have been mentioned. It is all very well criticising the existing system. I am sure many hon. Members will be getting to their feet and doing the same. However, I am not merely a negative critic. I always believe in looking at positive alternatives. One option which has been suggested is that there should be no disconnections without a court order. Earlier, I drew attention to the parallel between local authority tenants' rights and electricity consumers' rights. No housing authority in Scotland could evict a tenant without a court order, yet the electricity boards are apparently able to disconnect supplies without one. Often, the loss of an electricity supply can be almost as bad as the loss of a roof over a person's head. I hope that the Minister will comment on the possibility of introducing amending legislation in order to prevent disconnections without a court order.
Another suggestion is that there should be a statutory code of practice, not just a piece of paper, albeit an easily read and readily understood one. For some people, this code is not worth the paper it is written on because it does not give adequate protection to those whom it is meant to protect. Will the Minister consider the possibility of a statutory code of practice for the electricity boards? If the Department of Energy is too bone idle or unwilling to make the necessary provisions, why on earth cannot the Scottish Office for once be in the vanguard of progress instead of following in the wake of all the silly decisions that are taken by Departments here in London? I am sure


that even the Minister, whom I have criticised on odd occasions, would be praised by people like myself if he were seen to be taking initiatives along those lines.
Another suggestion is that fuel-direct plans should be more widely available, not just for those receiving supplementary benefit but other benefits as well. I know that strictly speaking that is not within the Minister's remit, but in the light of collective responsibility I hope that he will have something constructive to say about that suggestion.
In some cases the debt which has been run up is so large that we must face up to the fact that it will be virtually impossible to repay it. I have heard of some cases where, under the fuel-direct scheme, it would take about 20 years to repay a debt. In such cases it would be as well to be realistic and write the debt off if there are special circumstances and give consumers a fresh start rather than that they should have such huge debts round their necks, perhaps for the rest of their lives.
As I have mentioned, prepayment meters are often not as widely available as they should be. The electricity boards say that they will be made available where it is safe and practicable to do so. Will they consider giving them to consumers on request unless there are absolutely compelling reasons why they should not—for example, the danger of break-ins or possible danger to the people living in the house?
So far, the Government have failed to give any constructive response on these matters. On Second Reading last week I, and several of my hon. Friends, put these points to the Minister, although perhaps more briefly. He has had the best part of a week to do his homework. Therefore, I hope that when he replies he will show that he is not only aware of the problem but that he will do something about it. I have frequently raised in the House and elsewhere the scandal of warrant sales. This matter is even worse because it affects thousands more families. We are now in the middle of another severe winter. The Minister must say that he intends to do something by accepting my new clause.

Mr. J. Grimond: I trust that none of the extra money that may be made available to the electricity boards under the Bill will be used for uranium mining in Orkney. We are as emphatically opposed to uranium mining as we ever were.
I congratulate the North of Scotland hydro-electric board on its experiment with wind power. I have no objection to the money being used for that purpose. Orkney's power supply is now joined to the mainland, but windmills on the outer islands could make an important contribution to providing power and lighting on those islands. Some of the islands may come to depend upon wind entirely. I do not exaggerate the ability of wind power to deal with Britain's energy requirements, but the experiments are important. I hope that they will be encouraged and kept at a practical level.
We have not heard much about wave power lately, but we can make use of experiments by other countries. Wave power does not seem as useful as once it did, but it could be a large source of energy. I hope that we are continuing our experiments or ensuring that we can take advantage of experiments elsewhere.
I support what the hon. Member for West Stirlingshire (Mr. Canavan) said about disconnections and the Scottish climate. The weather may be bad in Stirlingshire, but it is far worse in Orkney and Shetland. Apart from cold and wind, we have to beat the damp and our fuel bills mount year by year. Many houses these days are all electric. In Orkney and Shetland we have no gas except calor gas so that we are entirely dependent upon electricity. To be cut off is exceedingly serious.
The most useful step would be to keep down the price of electricity. It is extraordinary and shocking that the price of electricity and other fuels has risen at a rate that exceeds the inflation rate. My constituents are annoyed when they look out of their windows and see the night sky lit up by the flaring of gas at Sullom Voe and, to a lesser extent, at Flotta. They cannot help thinking that there must be a scientific way of using that energy. A little of it is used but year after year we are told that the position will improve and that more of the gas will be used, but it is still flared off in enormous quantities.
Hardship and danger result from cutting off electricity supplies. In my experience the hydro board behaves with humanity. Unlike the hon. Member for West Stirlingshire, I have received few, if any, complaints about the board's lack of humanity to people in difficulty. I hope that the Minister can give an assurance that the welfare services are in a position to assist people who find paying their bills difficult. I accept that some people deliberately avoid paying, but I hope that people in genuine difficulty will not be suddenly cut off and that the welfare services ensure that hardship is avoided or kept to a minimum.

Mr. McKelvey: I welcome the opportunity to support the new clause tabled by my hon. Friend the Member for West Stirlingshire (Mr. Canavan). I admire his initiative.
Scotland's electricity boards cut off 20,000 households last year. If the figures are anything to go by, they will cut off electricity supplies from even more households this year. Figures show that well over three-quarters of the people cut off are poor and suffer hardship. Fuel poverty and the inability to afford adequate warmth results in an important social problem that affects a growing number of unemployed, elderly, sick and disabled people and their families throughout Scotland.
The main reason for disconnection is poverty. The electricity boards still believe in the myth that people can afford to pay but choose not to. They claim that most people pay up after disconnection. That is true, but, since it is a matter of life and death, means of paying the bills have to be found. People go to the moneylender or skip paying other debts.
The code of practice aims to alleviate hardship among families. It is an easy document to read, but its key defect is that it contains no relationship between the people defined as suffering hardship—the blind, unemployed and disabled—and the financial help available through Government agencies. A family in the hardship category may get nothing from the DHSS and is unlikely to be treated differently from any other family. There is no guarantee that people will receive money from Government agencies to help with their fuel bills. It is cruel to dispatch the "offenders" to Government agencies to state their case when their hopes will be dashed and they will receive no assistance.
Only this morning a lady of almost 70 years of age contacted me. She lives alone and her total income is


£37.50 a week. Religiously she puts £10 a week away to cover the cost of heating. She lives in an all-electric house and it takes £10 a week, not to heat the house, but to heat the one room to which she is confined. Apart from the cold that she suffers when she goes to the kitchenette from the living room to make a cup of tea, the lady fears the cost of heating the kettle. She can afford only £10 a week. She manages to pay her fuel bill but finds it difficult. She is confined to her home because of her disability and to one room because she cannot afford to heat any other rooms.
Beer, baccy and Benidorm are often blamed for fuel poverty. The myth is that low income people are feckless and reckless in the way that they manage their money. Whether disconnections or evictions are involved, some say that mismanagement and a frivolous attitude to money is to blame. The South of Scotland electricity board would argue that they are feckless. I have encountered that attitude on many occasions. I have had many cases referred to me, which I have referred to the SSEB. To be fair to the board, in many cases it has managed to reconnect the supply and come to some financial arrangement with the appellant. Not one of the cases with which I have had to deal has been due to mismanagement or feckless spending by the individual or family. It has been the opposite. They simply did not have the money to pay the debts they had accumulated in order to have an adequate standard of living. Most if not all are living under conditions that I and most hon. Members would consider inadequate.
I do not want to reel off thousands of statistics, because they can be not just boring but difficult to understand. However, it is worth mentioning some documents from which statistics can be obtained by any interested hon. Members. I recommend to the Minister that he should read, if he has not already, "Living in the Dark Ages" which is produced by Robert Edwards and Alistair Grange who are on the Scottish Fuel Poverty Action Group. It is an excellent document and some of the chapters are like reading "A Christmas Carol" by Charles Dickins. "The Human Cost of Fuel Disconnection" is a discussion paper that has been issued recently and is far-reaching in its analysis of the fuel poverty problem. There is an excellent document which, although produced in 1981, contains prophecies about fuel poverty. It is by the fuel poverty debts working party under the chairmanship of Arthur Long of the Strathclyde regional council. The prophecies contained within the document have borne fruit and all the horrible things that it said would happen are happening.
If there are to be between 17,000 and 20,000 disconnections at this time of the year the cost in human misery cannot be calculated in cash terms for all the families who, over the Christmas period, might find themselves without a light, and not just for the Christmas tree, if they had enough money to purchase one. The household might be in darkness and there would be no means of cooking a Christmas meal, if they could afford one. My hon. Friend the Member for West Stirlingshire pointed out that there is a case for a comprehensive fuel allowance to be considered and established by the Government.
I have written to the Minister about the climate and was astonished by the reply that I received. I do not believe that he could prove even statistically that the climate in the South of England is the same in the winter as the climate in the North of Scotland. I live in Kilmarnock, on the west coast where it is extremely damp. The dampness, added

to the cold, gives most of my constituents a rather rough time. Due to the rising unemployment in the area, many of them cannot warm their houses adequately. The Select Committee on Scottish Affairs is about to probe the effect of dampness throughout Scotland. Dampness is a scourge and when it is investigated I have no doubt that the effects of inadequate heating during the winter will throw some light on the difficulties suffered by some of our constituents.
The most important point raised by my hon. Friend the Member for West Stirlingshire was the fact that the electricity boards have the right to enter homes in order to make disconnections. That power requires legislative change. It should be discussed in the House. Boards should not have the right to enter homes and disconnect the supply as they have at present. Even if that right were curtailed severely, we should need a third party to arbitrate before the disconnection was made.
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It is not always those in debt who are disconnected. Not long after I had raised the matter of disconnection in the House and had written to the Minister, I went home, after two days' holiday, to discover to my horror that my electricity had been disconnected. The electricity board did not need to gain entry to my home, but it was inconvenient to find one's all-electric home disconnected. It was a mistake because I had paid my bill. The SSEB was quick to apologise and send someone to reconnect my supply. Apparently my supply had been inadvertently disconnected in mistake for someone else's. Although it was in the spring, it was inconvenient and annoying to have no electricity. However, that experience pales in comparison with that of someone who, during the winter months, with perhaps a sick or disabled child, elderly person or young family, has to go through not just the humiliation and inconvenience of having their electricity supply disconnected, but the danger of suffering illness or hypothermia from such disconnections.
I applaud my hon. Friend the Member for West Stirlingshire who tabled the new clause. I hope that we are successful in having it added to the Bill.

Mr. Norman Hogg: The purpose of the Bill is to increase the statutory borrowing limit of the North of Scotland hydro-electric board and the South of Scotland electricity board. The Opposition support the proposal. Taken with the new clause in the name of my hon. Friend the Member for West Stirlingshire (Mr. Canavan), it would ensure that some of the money that the House is making available to the electricity supply industry would be used to remove a social problem. All of us who represent urban constituencies in Scotland are becoming more and more aware that it would make the electricity boards more aware of their social responsibilities.
We know that the large increases are required to meet new developments, in particular the Torness nuclear power station. The planning and building of that power station was controversial. It is now under way and will be completed and ultimately generate electricity. It is right, therefore, that we should make money available for it, but I was struck by the admission by the Minister on Second Reading on 7 December 1982, at c. 741 of Hansard that only the Government could find the money required for that kind of project. That makes a joke of another Bill that is going through the House, which talks about an element of privatisation of the electricity supply industry. In one


case the Minister says that only the Government can find the money because of the scale of the project, but in another case we have a Bill that proposes privatisation. I am worried about what that shows us of the Government's attitude.
We are talking about £1,097 million for the Torness power station, which is a considerable sum of money. However, it is difficult to see what new projects on that scale will be developed by the South of Scotland electricity board and the North of Scotland hydro-electric board up to the end of the century. I understand why the limits are being increased.
A large section of Scottish opinion believes that our electricity supply industry already has surplus capacity, and that will be further increased when Torness comes on stream. In addition, we have de-industrialisation. If we were faced with the disastrous decision to close Ravenscraig, one spin-off would be additional overcapacity. Even if we save Ravenscraig—everyone in Scotland hopes that the Government will decide to retain it—the situation is bound to get worse. Every closure, large or small, causes problems for the electricity supply industry. Many industries use electricity as a primary fuel. As the closures continue, so does the overcapacity.
I understand that we are voting the extra money to meet existing commitments and for updating plant. In the foreseeable future the industry's main activity will essentially be updating and refurbishing existing systems. I repeat that I cannot see what major projects will take place before the end of the century.
I asked the Minister on Second Reading what major policy decisions on generation he envisaged for the electricity boards in Scotland for the immediate years ahead. I hope that today we shall have a better reply. Both boards are capital intensive, as is the whole supply industry. Manpower levels have constantly fallen, certainly since the introduction of productivity agreements in the early 1960s. I well recall all that happened then. Capacity and demand continued to rise, while manpower continued to fall. Although the industry has more capacity than is necessary to meet the economy's needs, it has gone some way to make itself an efficient organisation.
My hon. Friend the Member for West Stirlingshire argues that a financially efficient industry, given further moneys from the Government, could take a different line on disconnection. My hon. Friend shows great interest in the problems of poor people in Scotland and it is to his credit that he brings the matter before the House.
I hope that the Minister has read the report to which my hon. Friend the Member for Kilmarnock (Mr. McKelvey) referred. It was prepared by the social work department of Strathclyde regional council and is entitled:
The fuel debts working party of Strathclyde regional council report.
It was prepared under the direction of Councillor Albert Long, the convenor of the social work committee, and contains useful information about a worrying situation.
Many people faced with disconnection live in what are described as modern homes. They are often council properties and are heated by electricity or by gas that requires electricity to operate the system. A disconnection means that those people have no means to heat their home, cook or have hot water. The houses are often in smokeless zones and are frequently built of inferior materials, as the

Select Committee on Scottish Affairs will undoubtedly discover. They are damp, have heating problems and consequently high fuel bills. The disappearance of open fires also brings problems. Poor people suffer the consequences of disconnection.
Cases are brought to my attention mainly by the unemployed workers centre in Cumbernauld. Councillor Eamon Monaghan has made a special study. One family came off the fuel direct scheme and the husband went on to invalidity benefit and ceased to receive supplementary benefit. The problem then arose.
Prepayment meters might help. I was a full-time trade union officer for the administrative and professional staffs in the electricity supply industry. I remember when we ran down the prepayment sections in the district offices of the South of Scotland electricity board. It was the board's policy no longer to install meters and to remove those already installed, but with the changing economic situation and rising fuel costs at the beginning of the recession it changed its mind.
Many people who would have benefited from the system do not have a prepayment meter. I know of the difficulties in my constituency of having prepayment meters installed. There are too few prepayment meters, and too few people who are likely to get into difficulties are identified early enough. More must be done for families whose fuel supplies are disconnected.
I hope that the Minister will respond positively to my hon. Friend's proposal. He has done the House a service by bringing the subject to our attention. He has also done a service by having the matter debated when these problems are becoming acute for many families. I hope that the Government will have something positive to say about what they intend to do about the unfortunate people who face a Christmas without heating or lighting.

Mr. Donald Dewar: It has been an interesting, short debate on clause stand part and new clause 1 which has been conveniently combined with it. I do not intend to follow the knowledgeable remarks of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) about the wider issues in the industry as we considered some of them well on Second Reading. On that occasion, my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) spoke for the Opposition.
The electricity industry in Scotland faces enormous problems. One of the most important is the external financing limit and funds that will be available for future development. I hope that the Minister agrees that considerable overcapacity is another. One of the prime reasons for that is the serious and dangerous recession into which the Minister and his colleagues have plunged the country by mismanagement of the economy in the past few years.
I have recently examined the South of Scotland electricity board's report for 1981–82. It dealt with the closure of Invergordon which, to use what used to be a fashionable Tory phrase, "at a stroke" reduced by 26 per cent. the output of Hunsterston B. I take the board's word for it—I have no reason not to—that that will reduce its coal requirement for a year by 750,000 tonnes. Although Invergordon is a spectacular example of the result of the Government's policies, there are many others. We are witnessing dangerous circumstances which affect almost every side of the nation's life. They have resulted in high unemployment and an increasing toll of bankruptcies.


Another certain byproduct is that life has become extremely complicated for the electricity boards that operate in Scotland and other parts of the United Kingdom.
I shall not concentrate on clause stand part as it would be difficult to do so without rehearsing what we have already gone through on Second Reading. I should like to deal with the new clause of my hon. Friend the Member for West Stirlingshire (Mr. Canavan). Like many other hon. Members, I congratulate him on his ingenuity in drafting it and getting it selected. It is a peg for debate. There are some difficulties with some of the phraseology—I am sure that my hon. Friend would be the first to agree. If it reaches the statute book, I am not sure what parts of the increased borrowing will be allocated to the end in mind, although an adequate sum will have to be allocated. Nor am I sure about the definition of "result in hardship". As has been said by many hon. Members, disconnection from electricity almost invariably leads to hardship. Varying degrees of social crisis may be attached to the personal hardship—it may depend on the age of the person, the composition of the family, where children are involved and so on—but for almost everyone, suddenly to live without lighting and, often, heating or a principal form of heating will cause considerable hardship. It is something that goes beyond the normal definition of mere social inconvenience.
Perhaps as a result of the recession, the problem of fuel disconnection will sadly be with us for a long time. I shall quote some figures. They are a little out of date, but more recent statistics are not available. Between 1977 and 1979, the number of employed people living on earnings below the supplementary benefit level for families rose from 1·9 million to 2·1 million, and the number has almost certainly increased since then. The poorest 10 per cent. of employed male workers now earn 64·5 per cent. of average earnings.
Unfortunately, the type of people who are likely to get into trouble with fuel disconnections are, because of the Government, becoming much more numerous and a much more distinct group in society. We see, as will anyone who has examined the new earnings survey for 1982, that there is plenty of evidence to suggest that the gap between those in skilled jobs that involve overtime and substantial earnings and those who are at the bottom end of the wage-earning scale is becoming greater. That will produce increasing problems for the electricity boards.
It is fair to point out that there has recently been a considerable improvement. There is a long way to go but in terms of the number of people who have been disconnected by the South of Scotland electricity board, there is no doubt that the code of practice and the efforts that have been made by such groups as the Fuel Poverty Action Group in co-operation with the South of Scotland electricity board have improved matters.

Mr. McKelvey: Although there have been improvements, is my hon. Friend aware that last September there were 1,137 disconnections in the SSEB area, and that there were 1,166 this September? Does he agree that, despite the SSEB's good intentions, an increasing number of people will fall into the trap and that the number of disconnections will continue to increase?

Mr. Dewar: I am interested in what my hon. Friend has said, although I am not familiar with those figures. The SSEB's accounts for 1981·82 show that to the end of March 1982 3,522 people were cut off from the electricity

supply as compared with 4,471 for the equivalent period the year before. That is a considerable reduction. I have seen figures from other sources that suggest that the range is even wider than that. I am told that the number of disconnections to the end of July 1981 in the SSEB area was 5,734. That is horrific and startling. In September 1982—the most recent figure that I have been able to obtain—the number is down to 3,450. I hasten to say that that is still a worrying number and it should not give rise to any complacency. Nevertheless, although in the year to September 1982 there were 12,063 disconnections in the SSEB area, that represents a significant drop as compared with the previous year. I should like that drop to continue. There is a crisis but we have witnessed some marginal improvement. It would be churlish if we did not recognise that and pay tribute to the board's efforts in that respect.
Nevertheless, an enormous amount of hardship is concealed in the figures. The problem is that long-term disconnection is becoming a major feature of the group. It is perhaps not surprising that 80 per cent. have been disconnected for more than one month, but at one point in the depths of last winter more than 1,100 consumers had been disconnected for more than a year.
That suggests a level of misery which, from our personal experiences, the Minister and I might find difficult to encompass. I am used to the conveniences of comfortable living, and it would be hard to cope with the elementary conveniences with which these people must live. They are often forced on them through no fault of their own, often through misfortune and perhaps through an inability to manage. However, as a co-operative venture, society should try to help.
There is still room for improvement. The point of the debate is to discover whether there is some way in which we can produce more improvements as well as a more sympathetic and supportive approach to these social problems.
A number of things have produced a slight improvement in the figures to which I have referred, one of which has been the introduction of prepayment meters. Every hon. Member in the West of Scotland—I have no reason to believe that Edinburgh is that different—has had long correspondence with the electricity board about the introduction of prepayment meters.
If, taken in isolation, I have some sympathy with the management's arguments because prepayment meters can produce problems in terms of security, what happens if the money is stolen and who is responsible for repaying it? I do not minimise these difficulties, and I can understand the electricity board's reluctance to move back to prepayment meters on demand. However, we have gone a long way towards that, and it has been of considerable help to a large number of families.
The SSEB says that it will install these meters if it is "safe and practicable" to do so. I still have some reservations about the way in which that phrase is interpreted. I am told—I record this with some concern—that in certain areas of deprivation, where social judgments are made by the board, perhaps on the basis of its bad debt experience, there is still a reluctance to install prepayment meters.
In some cases, there is the strange and sham performance of installing a prepayment meter that is fitted without locks. The idea is that 50p is put in the slot to activate the supply, but it is then taken out and the person gets a normal bill at the end of the period. There may be


some slight psychological advantage in the fact that each time money is put into the slot it reminds the person that he is consuming electricity, but that does not have the desired advantage of a proper prepayment meter. The basis of such a meter is that one pays as one goes along and knows that the money is "in the bank". Such a meter ensures that a person is not faced with a substantial lump sum demand, perhaps on a precarious family budget, at the end of the quarter. Having moved a long way towards making prepayment meters freely available, it would assist if the board completed the job.
I also understand that in the SSEB area there has been a considerable increase in the use of the fuel direct scheme. As the Minister knows, this scheme is available to people who are on supplementary benefit and who are in arrears. Unfortunately, the number of people on supplementary benefit has risen sharply and is now about 6½ million throughout the United Kingdom. That is a further sign of the difficulties into which we have all been plunged by the economic mismanagement of this Administration.
According to the SSEB's annual report, about 25,000 people in the South of Scotland are now on direct payment compared with 17,000 the year before. I understand that that is a considerably higher proportion of users than in other electricity board areas. I welcome the fact that this scheme is available, and I am pleased that last April it was possible to arrange a relaxation of the old SSEB rule, whereby if a person had a debt above £150 he could not go on to direct payment. That was a sensible change, although I understand some of the reasons for the board's reluctance to agree to it.
One or two consumers in my constituency were not so impressed with the change in the regulations, which meant that the weekly deduction went up from £1·20 to £2·40 in order, as the Minister said, to facilitate repayment over a shorter period. Be that as it may, the change is a hopeful development.
We are all examining ways to improve the regulations. Would it not be better to allow people who receive supplementary benefit to go on to the direct payment system if they are not yet in arrears but if they feel that direct payment would help them better to manage their affairs?
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The South of Scotland electricity board still takes the view that arrears must be accumulated before the direct payment system is brought into play and arrangements are made through the Department of Health and Social Security. The direct payment system should be available to anyone on supplementary benefit who is genuinely fearful about his affairs and who wishes to avoid falling into arrears. The extension of direct payments in that way would be a minor but especially helpful step.
Although there are problems of definition in the code of practice, there is always room for improvement. The code has generally been a success and in that context I am grateful for the support of my hon. Friend the Member for Dunbartonshire, East. Although the code has been a success, some people have suggested to me that it should be put on a statutory rather than a voluntary basis. Today, I took the trouble to examine replies by a range of Ministers, mostly from south of the border, to questions

about the implementation and interpretation of the code of practice. I found that many of the decisions are left to the individual boards.
That arrangement causes problems. Anyone who has examined the recent Policy Studies Institute report even in the cursory way that I have will see that there are wide variations in practice depending on in which board area one happens to live.
Social agencies and voluntary agencies would widely welcome a statutory framework for the boards rather than leaving the arrangements to voluntary guidance, which allows a great deal of come and go. I do not suggest that a statutory code would be revolutionary, but I suggest to the Minister that such a code is worth examining.
My hon. Friend the Member for West Stirlingshire spoke about disconnections. I notice that, in its latest annual report, the SSEB says
There is no effective alternative to maintaining the power of disconnection.
It may well be that, in extremis, disconnection will be necessary in some cases, although I wonder whether the social cost-benefit analysis would support such disconnections. In any event, as my hon. Friend the Member for West Stirlingshire said, we know that there will be a report. An article in The Scotsman on 5 November referred to it at some length. It will be entitled "Fuel Hardship—Towards a Social Policy". The report, which is being prepared by officials for COSLA, will cover the whole of the United Kingdom. A key recommendation will be that there should be no disconnection without a court order. There may be difficulties in that. I have some reservations because I can see the problems, but the proposal should be considered with interest, concern and some sympathy to see whether it would help.
When I was a legal apprentice I attended the small debts court in Glasgow, where hundreds of small debt actions were raised on behalf of the SSEB. Normally there is a disconnection, followed soon afterwards—very often when the family's finances are further strained by the expense of obtaining temporary methods of cooking and heating—by a court action to recover the money, with all that follows from that because of our archaic and long-unreformed laws on diligence. That is a typical picture, but what should happen is that where there will almost certainly be a summary cause action to recover the money disconnection should not be possible until a court has considered the matter and there has been certification that the proper procedures in the code of practice have been carried out. That may be clumsy, expensive and difficult. At the moment it is only a possibility, but we should consider it and I hope that the Minister will show an open mind about how we conduct such matters in the future.
The Opposition will try to keep the matter under review and to monitor it, because we are unanimous in our belief that it is a genuine social problem. The statistics that we have been discussing during the past few hours are the evidence of much misery and social hardship. The reasons for that—the Minister will not resent this because he is used to being told it, and he has developed a hardening of the skin—are the recession and the Government's fuel pricing policy, which has forced up electricity and gas prices artificially, far outstripping the increase in earnings and the increase in inflation. Perhaps he can think about those matters at his leisure and in private.
From the evidence of the past few days, Scotland will suffer yet another very hard winter. My hon. Friend the


Member for Kilmarnock talked about the different climates in Scotland and in the south of England. I travelled on the morning flight with my hon. Friend today and it was a subject of conversation as we shivered our way to the aeroplane in Glasgow and arrived in London to a distinctly warmer reception. I watch the gripping frost in the west of Scotland, remembering what happened to our housing stock last winter, with some apprehension, but I am sure that if I go too far down that road, Mr. Dean, I shall find myself in some difficulty. Every disconnection would be a tragedy in such a climate.
I hope that the Minister will remember that in January 1982 there was an arrangement with all the British electricity boards that there would be no disconnections for only one week on the grounds that, in such severe weather, disconnection would be barbarous and grossly unfair to members of the public with financial difficulties. If we have the same appalling climatic conditions during the next few weeks, I hope that the moratorium on disconnections that was possible in early 1982 will be considered again, perhaps on an extended and much more generous scale. I saw what happened on the housing schemes in my constituency. The loss of the basic means of heating, lighting and power in severe weather can be a disaster, and it is a matter that hon. Members should never consider lightly.

Mr. Alexander Fletcher: The hon. Member for Glasgow, Garscadden (Mr. Dewar) made several points and he attempted to be constructive and helpful. Naturally, I wish my response to be similar. The hon. Gentleman mentioned overcapacity in the Scottish electricity system. I cannot deny that, but the main purpose of the Bill is to provide funds for the construction of the nuclear station at Torness. As the debate illustrated especially well, the price of electricity is of even greater importance. The Government believe that electricity generated by nuclear stations is cheaper than that generated by coal or oil. Hydro-electricity is cheaper, but there is only a limited volume. The Bill that provides capital to the Scottish electricity boards is before the House because of the essential need to finance the continuation of the construction of Torness.

Mr. Dewar: Will the Minister agree that one of the great disappointments under all Governments of recent years has been the failure of nuclear generating capacity to meet its price targets? Will he say how confident he is about Torness? At what price does he expect Torness to be able to produce electricity?

Mr. Fletcher: We expect Torness to improve on Hunterston B, and Hunterston B was a considerable improvement on coal, although it was a prototype station. That should give the House some encouragement and should give the boards' consumers in Scotland some encouragement for the future, bearing in mind the points that have been stressed by Labour Members during the debate.
The hon. Member for Garscadden mentioned the closure of the smelter at Invergordon—a matter that has been the subject of debate on previous occasions. I must correct him on one point. The prime reason for the closure of the smelter was not the price of electricity, important as that was; it was the absolute collapse of the aluminium

price on world markets. That is what did the damage to the British Aluminium Company and to some other companies in that field.
With regard to disconnections, I do not wish to minimise in any way the importance of the considerations that lead the boards, the social work departments and the Department of Health and Social Services to deal with the problems of disconnection—and to deal with them as sympathetically as possible, as I shall endeavour to explain. The hon. Gentleman mentioned specifically prepayment meters and answered the question himself when he said that the policy of the boards is to install them whenever practicable. He was kind enough to mention some of the difficulties that the boards face in connection with prepayment meters.
The hon. Gentleman suggested that the trigger for fuel direct payments by the DHSS should not necessarily be the accumulation of debt by consumers. I appreciate the thinking behind that suggestion and would like to consider it further with my hon. Friends. I do not know how practical it would be to switch direct payments from the DHSS in the circumstances that the hon. Gentleman envisages, but I should like to consider it. Perhaps when I have done so I can come back to the hon. Gentleman and tell him what conclusions my right hon. and hon. Friends and I have been able to reach.
The hon. Gentleman suggested that the code of practice was working reasonably well. I would support that contention. It is working well on a voluntary basis. I shall take note of the hon. Gentleman's points.
I believe that disconnections have to remain as a last resort, otherwise people might say "Why should I pay my electricity bill if, at the end of the day, no action will be taken against me if I do not do so?" If any Labour Member has a remedy for the problem other than disconnection, I hope that he will tell me about it.
I hope that hon. Members will bear in mind the statutory responsibilities of boards to balance their books, to match their expenditure with their revenue, and not to discriminate unfairly to the benefit of any particular category of consumer. The boards must carry out their statutory responsibilities. They need some sort of deterrent against certain people. I hope that Labour Members will not suggest that in Scotland there are not some people who would dodge the payment of their electricity bills if there were no extreme remedy against them when they flagrantly abuse their responsibility.

Mr. McKelvey: I think that all hon. Members would accept disconnection if someone did not want to pay the bill and the matter went to arbitration. However, the Minister has to bear some responsibility for his Government's pricing of electricity over the past three years. They have doubled the price of electricity, even if we take inflation into account. It was in 1981 that the South of Scotland electricity board made a profit of £27 million, but it still put up the price of electricity. One remedy that the Minister could take is to make the electricity cheaper.

Mr. Fletcher: I repeat that the purpose of the Bill is essentially to finance the construction of a nuclear power station. The benefit of that should be cheaper electricity in Scotland in the years ahead.
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I should like to say a little more about disconnection policy so that there can be no misunderstanding about what


the boards are trying to achieve. The Scottish electricity boards carry out disconnections in accordance with the industry's code of practice, as hon. Members are aware. The operation of the code of practice has been examined by the Policy Studies Institute, an independent body. Its report, which was published recently, confirms that the Scottish electricity boards adhere to the code and that breaches rarely occur. Of course, human nature being what it is, breaches may occur from time to time, but the independent review states that such breaches are rare.
Disconnections are carried out only after all attempts to make the customer come to an arrangement to pay all his debt over an extended period have failed. Various means are available to consumers to help them budget to meet their bills, including savings stamps and monthly payment schemes. The SSEB operates bi-monthly billing with the option of monthly bills. Those options are widely publicised, as the hon. Member for West Stirlingshire (Mr. Canavan) made clear in his speech.
The boards will also install prepayment meters, subject, as the hon. Member for Garscadden said, to those meters being safe and practical. The success of the board's efforts can be seen by the fall in the number of consumers off supply at the end of November when the figure was 3,525 compared to 5,379 for the same month last year. The total number of disconnections for the year ending 30 November 1982 was 14,903 compared with last year's figure of 17,889, a decrease of almost 3,000. For consumers in receipt of supplementary benefit there is a fuel direct scheme operated by the boards and the DHSS at the request of the consumer. There has been an increase of the numbers participating in that scheme from 23,332 in November last year to 33,652 at the end of last month. The trend, as has been acknowledged by at least one Opposition Member, reveals the willingness of the boards and DHSS to continue to seek better methods of tackling the problem, which has been brought to our attention by Opposition Members.
I say to the hon. Member for West Stirlingshire that Scottish consumers use more electricity, not so much for climatic reasons but because local authorities in Scotland, in their wisdom, gave tenants no choice on the installation of their central heating systems. In many areas of west central Scotland in particular, tenants were given houses that were all-electric, with underfloor heating. Not surprisingly, they found that the cost of the heating was well over the rents that they were being asked to pay. Because they could not afford to pay the full costs of electrical heating, many of them installed other means of heating their homes, and switched off the system that was supplied.
It is unfair to blame the problem entirely on the electricity boards. The hon. Gentleman must look to local authorities in Scotland, which are largely controlled by the Labour Party, which put up those houses, gave no choice to the tenants and took the steps that have created so many of the problems that he illustrated to the House.

Mr. Canavan: The Minister is making precisely the point that I made on Second Reading. As far as possible, tenants should be given a choice of the fuel that is to be used for heating their houses. Will the Minister or his colleague send an appropriate circular to the local

authorities advising them, or even directing them, on this matter? Will he give them adequate funds to see that his recommendation is implemented?

Mr. Fletcher: The hon. Gentleman is suggesting that we spend money on all fronts. I am saying that some local authorities and many tenants have moved in this respect. The blame lies with the planning, the design and the decision to build the houses without giving any choice to tenants in the first instance. I suggest that the hon. Gentleman tries to draw too many conclusions from his constituency case. The action that he took was responded to promptly by the electricity board. He should bear that in mind when making his general complaint. Neither he nor Strathclyde's social work department needs to wait for a debate of this sort before raising the specific cases that the hon. Gentleman has produced.

Mr. Canavan: The Minister is not addressing himself to the constructive alternative that my hon. Friends and I have offered. The unfortunate instances to which I have referred would never have occurred in the first place if the onus were on the electricity board to obtain a court order before it disconnects someone's electricity supply. These disconnections should not happen. Consumers should not have to ask their Members of Parliament to intervene. There should be some statutory protection. The new clause will go some way towards meeting the need for that protection.

Mr. Fletcher: I know that the hon. Gentleman and his hon. Friends are anxious that the onus of a court order should be introduced. I am not sure whether the hon. Member for Garscadden, who knows something about these matters, takes the same view.

Mr. Dewar: It is worth looking at.

Mr. Fletcher: The hon. Gentleman says "It is worth looking at", and in so doing uses great political sense. There are many things that are worth looking at, but practicability has to be taken into account. It is not the boards' view, and nor is it the Government's, that it would be a practicable proposition to require a court order every time a disconnection was necessary.

Mr. Canavan: Why?

Mr. Fletcher: Evidence of non-payment is collected by the boards long before disconnection takes place. The boards make considerable efforts to try to help consumers to meet their requirements. They try to understand the nature of the problem in individual cases. When all that has been done, the boards feel that they have substantial evidence that insufficient effort has been made by the individual to pay his bills or to seek help from the appropriate quarter if he is unable to pay. For that reason the boards' advice—we support their view—is that the onus of a court order is unnecessary.
The hon. Member for West Stirlingshire emphasised—he has done so previously—the importance of a court order before disconnection takes place. The Government feel that there needs to be the sanction of disconnection. If there is not, why should anyone pay? We believe that the procedures that the boards employ, which have been verified by an independent study, make it clear that every effort is made in using the code of practice to try to help consumers long before disconnections are contemplated.
The right hon. Member for Orkney and Shetland (Mr. Grimond) mentioned a number of matters. I note his opposition to any suggestion that there should be uranium mining on Orkney. His constituents have also made representations direct to the Department of Energy and the Scottish Office. The windmill projects are very important and may provide a solution for some of the smaller recommendations in the outlying areas. The North of Scotland hydro-electric board is contributing to a consortium investigating the suitability of prototype wave machines on the west coast of Scotland, and that possibility is still in business.
I hope that I have met points that were made by the right hon. Member for Orkney and Shetland about disconnection. The price of electricity is not to be increased during the coming year. He mentioned the flaring of gas, and will know that the Peterhead power station has been converted and is now burning gas. The benefit of that, because of the new connection that we inaugurated between the North of Scotland and the Orkney Islands, will go to the islands in terms of gas being used. I hope that the right hon. Gentleman will agree that this is a proper and sensible purpose for the gas, instead of having if flared off shore. I am glad that the right hon. Gentleman has few complaints about the board and the services that it is providing, and that he welcomes the fact that the welfare services are making a big effort to assist.

Mr. Dewar: I am glad to catch the Minister's eye before he comes to a conclusion, which cannot be far off. I raised specifically with the hon. Gentleman what happened in January 1982, when, because of the severe weather, and with the approval and active concurrence of Ministers, arrangements were made to have a moratorium on disconnections. If we have another severe winter, I am anxious to have an assurance that such a policy would be considered and actively pursued by Scottish Office Ministers and the boards.

Mr. Fletcher: If a similar problem arises, we shall consider carefully that solution.
The hon. Member for Kilmarnock (Mr. McKelvey) again spoke of disconnections and I make no complaint about that. However, no genuine case needs to go to a monelender as he suggested, because the DHSS with its fuel direct scheme is more than willing to assist, as are the electricity boards. I am glad that he acknowledged the quick response that he received from SSEB when he found himself a disconnected consumer because of an error. We have here an example of a poor chap, who for whatever reason—perhaps the cheque was in the post or any of the other problems that can apply—was cut off. Nevertheless, the Committee will be glad to hear that when he was disconnected and made proper representations to the board, within a few hours he found himself back on the grid.
The hon. Member for Dunbartonshire, East (Mr. Hogg) wondered what new projects would require finance between now and the end of the century. The Bill looks to the end of the decade and essentially provides funds for the Torness construction project. Other requirements will arise, as the hon. Member acknowledged, such as capital spending projects for updating and refurbishing the existing system. This finance is included in the borrowings that are being sought. At present approval is not being sought for any major projects after Torness. No

application has been made to my right hon. Friend for any further major power station projects. I am glad that the hon. Gentleman acknowledged that the industry is efficient.
These are the points that have been raised by Labour Members. I accept that the problems of disconnection are vexing and cause hardship, but I repeat, every effort is being made to consider the circumstances of each individual case. The last thing that the boards, the DHSS, the Scottish Office, or anybody else wishes to do is ride roughshed over electricity consumers. We are continually examining and re-examining the methods employed in all these circumstances with a view to being as fair-minded as possible, not just to those who find that they cannot meet their electricity bills, but to the vast majority of consumers who meet their bills whatever the circumstances.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

New Clause 1

DISCONNECTION OF ELECTRICITY SUPPLY

Part of the increased borrowing powers referred to in section 1 shall be used by the Scottish electricity boards to avoid disconnections of electricity supply to households where such disconnection would result in hardship.—[Mr. Canavan.]

Brought up, and read the First time.

Question put, That the clause be read a Second time:—

The Committee divided: Ayes, 30, Noes, 101.

Division No. 30]
[8.45 pm


AYES


Buchan, Norman
Hamilton, W. W. (C'tral Fife)


Callaghan, Jim (Midd't'n &amp; P)
Johnson, James (Hull West)


Canavan, Dennis
McKay, Allen (Penistone)


Carmichael, Neil
McKelvey, William


Cocks, Rt Hon M. (B'stol S)
Mason, Rt Hon Roy


Cowans, Harry
Morris, Rt Hon C. (O'shaw)


Cryer, Bob
Morton, George


Dalyell, Tam
Powell, Raymond (Ogmore)


Dean, Joseph (Leeds West)
Ross, Ernest (Dundee West)


Dewar, Donald
Smith, Rt Hon J. (N Lanark)


Dixon, Donald
Snape, Peter


Dormand, Jack
Stott, Roger


Dunwoody, Hon Mrs G.
Woolmer, Kenneth


Eastham, Ken



Evans, John (Newton)
Tellers for the Ayes:


Ewing, Harry
Mr. Frank Haynes and


Hamilton, James (Bothwell)
Mr. Norman Hogg.


NOES


Alexander, Richard
Dorrell, Stephen


Alton, David
Douglas-Hamilton, Lord J.


Ancram, Michael
Dover, Denshore


Aspinwall, Jack
Emery, Sir Peter


Beaumont-Dark, Anthony
Fairbairn, Nicholas


Berry, Hon Anthony
Fairgrieve, Sir Russell


Boscawen, Hon Robert
Fenner, Mrs Peggy


Bottomley, Peter (W'wich W)
Fletcher, A. (Ed'nb'gh N)


Bright, Graham
Fletcher-Cooke, Sir Charles


Brooke, Hon Peter
Fookes, Miss Janet


Brown, Michael(Brigg &amp; Sc'n)
Fowler, Rt Hon Norman


Buck, Antony
Goodlad, Alastair


Carlisle, John (Luton West)
Grant, Anthony (Harrow C)


Chapman, Sydney
Greenway, Harry


Clarke, Kenneth (Rushcliffe)
Griffiths, Peter Portsm'th N)


Cockeram, Eric
Grimond, Rt Hon J.


Cope, John
Gummer, John Selwyn


Costain, Sir Albert
Hamilton, Hon A.


Cranborne, Viscount
Hamilton, Michael (Salisbury)






Hawkins, Sir Paul
Parris, Matthew


Henderson, Barry
Penhaligon, David


Howell, Ralph (N Norfolk)
Proctor, K. Harvey


Hunt, David (Wirral)
Rhodes James, Robert


Hunt, John (Ravensbourne)
Rumbold, Mrs A. C. R.


Jessel, Toby
Sainsbury, Hon Timothy


Johnston, Russell (Inverness)
Shepherd, Colin (Hereford)


Jopling, Rt Hon Michael
Speed, Keith


Knight, Mrs Jill
Speller, Tony


Lee, John
Spence, John


Lennox-Boyd, Hon Mark
Stanbrook, Ivor


Lester, Jim (Beeston)
Stevens, Martin


Lloyd, Peter (Fareham)
Stewart, A. (E Renfrewshire)


Loveridge, John
Stradling Thomas, J.


Lyell, Nicholas
Taylor, Teddy (S'end E)


McCrindle, Robert
Thomas, Rt Hon Peter


MacGregor, John
Thompson, Donald


McNair-Wilson, M. (N'bury)
Thorne, Neil (Ilford South)


Major, John
Townend, John (Bridlington)


Marland, Paul
Trotter, Neville


Mates, Michael
Viggers, Peter


Mather, Carol
Waddington, David


Maxwell-Hyslop, Robin
Wainwright, R. (Colne V)


Mellor, David
Wall, Sir Patrick


Mills, Sir Peter (West Devon)
Waller, Gary


Monro, Sir Hector
Watson, John


Mudd, David
Wells, Bowen


Murphy, Christopher
Wheeler, John


Myles, David
Younger, Rt Hon George


Neale, Gerrard



Needham, Richard
Tellers for the Noes:


Neubert, Michael
Mr. Tristan Garel-Jones and Mr. Ian Lang.


Newton, Tony



Osborn, John

Question accordingly negatived.

Bill reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Lands Valuation Amendment (Scotland) Bill

Order for Second Reading read.

The Under-Secretary of State for Scotland (Mr. Allan Stewart): I beg to move, That the Bill be now read a Second time.
This is a short Bill with one substantive clause and a single purpose. I believe that it will be welcomed by all hon. Members. We seek, through the Bill, to nullify the unintended consequences of a repeal made by the Local Government (Scotland) Act 1975.
Section 42 of the Lands Valuation (Scotland) Act 1854 defines lands and heritages subject to valuation for rating. There are two provisos to the reference in that section to "machinery fixed or attached". One says that the term
is to be construed as including all machinery, machines or plant in or on the lands and heritages for producing or transmitting first motive power or for heating or lighting such buildings.
The other says that machinery fixed or attached
shall not include machines, tools or appliances which are only so fixed that they can be removed from their place without removing any part of the building.
The question that arises is what happens to plant which is both moveable and for the production of first motive power, and so on. The answer originally was that the proviso about moveability began with the words "save as herein provided" which insulated the description of plant specified as being in valuation from the description of plant exempt from valuation.
However, paragraph 5 of part II of schedule 6 to the Local Government (Scotland) Act 1975, which took out of valuation certain electric motors, repealed the words "save as herein provided". It was clearly not intended at the time to take out of valuation all moveable plant and machinery providing first motive power, and so on, and none of the interested parties seems to have pressed for that to happen.
Earlier this year the Lands Valuation Appeal Court concluded on an appeal from the Post Office against the assessor for Orkney and Shetland that certain generators escaped valuation because the words "save as herein provided" had disappeared and that this meant that the proviso regarding moveability overruled the proviso regarding first motive power and that, accordingly, machines for producing first motive power were exempt from valuation if they were moveable. We estimate that if this principle were carried into effect in relation to all similar plant in Scotland there would be an annual loss of rate income of about £40 million.
We have received urgent representations that this would be quite unacceptable as the unintended consequence of legislation in 1975 addressed to quite different purposes. We accept this point, as do the Scottish office of the CBI. The purpose of the Bill is, therefore, to reverse the unintended effects of the 1975 legislation.
Hon. Members will see from clause 1(1) that the words in question are deemed never to have been repealed. That means that the provisions will have effect over the whole of the present financial year, avoiding the uncertainty, abortive work of assessors' departments and serious loss of rate income for that year which would otherwise ensue.
Two other points deserve attention. First, the electric motors which were deliberately derated by the 1975 Act


are protected against any effect of the words restored. Second, clause 1(2) ensures that any successful appellant will not be deprived of the benefits of his action before enactment of the Bill, although after its enactment he will be on the same footing as other ratepayers.
This Bill is an attempt to correct as soon as possible a consequence quite unforeseen and unintended of a provision now seven and a half years old. Local authorities in particular stand to lose significant income and their assessors' departments stand to be confounded by a mass of appeals if we do not take quick action to restore the position to what it was up to 1975. The Convention of Scottish Local Authorities supports the measure and the CBI's Scottish office does not oppose it.
The Government's decision to introduce the legislation followed a meeting between myself, and the hon. Members for Stirling, Falkirk and Grangemouth (Mr. Ewing), Clackmannan and East Stirlingshire (Mr. O'Neill) and West Stirlingshire (Mr. Canavan). The hon. Member for Glasgow, Garscadden (Mr. Dewar) was involved in a debate on the Floor of the House and was not able to be present. The discussions were constructive and helpful. The three hon. Members represent the Central region, which would be particularly affected if this measure were not introduced. I commend the Bill to the House.

Mr. Donald Dewar: For once the Minister is on safe ground when he says that the Bill will be welcome by all sides of the House. It has been canvassed in private places. We shall give it a fair wind. The Minister said that the Bill was technical. That is a brave euphemism. I found it incomprehensible when I first read it. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) confided that he does not quite understand one sentence in the Bill even now. That means that the Bill must be arcane in the extreme.
The measure is narrow. It reverses a specific judgment—the Post Office against the Assessor for Orkney and Shetland. It does not impinge on the broader aspects of the derating of outside plant and machinery which is the subject of recent legislation and which may be the subject of dispute when the rate support grant is discussed in the House. Although some provision has been made for Orkney in particular, there is cold comfort for the Central region, Falkirk or a number of other local authorities. The unanimity about this measure will not extend to such broad matters.
It is a matter of some satisfaction to those of us who take a masochistic pleasure in Committee work to come across a Bill such as this which has been caused by an unattended oversight in Committee on previous legislation. It is caused by the survival or omission of words such as "save as herein provided". I cannot remember whether the words were left in or taken out. It shows that there is some point in the more dreary Committee stages that we inflict upon each other.
The constitutional interest of the Bill is that it is retrospective. I like some of the euphemisms used by the Minister. He seemed to suggest that it would avoid a serious loss of rate income or was for the avoidance of uncertainty. However, it is, at the end of the day, retrospective legislation. We are prepared to support it because after six and a half years the courts tested a loophole that has been discovered.
I accept that if it were not put right there would be an unintended, substantial and serious loss suffered by regional authorities in Scotland. The Minister has suggested a figure as great as £40 million, and that would be important. Given what has happened in the past week with the rate support grant settlement and the difficult times that regional authorities are being asked to face because of the Minister's parsimony and meanness, we should be thankful for small mercies that another unexpected loss has not been inflicted upon them.
I am grateful for this sensible Bill. We do not intend to delay the House. I hope that it will pass speedily on its way and rescue us from an impasse that none of us intended or expected.

Sir Hector Monro: I want to put one or two points to my hon. Friend the Minister about the Bill, which we all accept. I am grateful for the letter that I received about the representations made to me by COSLA and the Dumfries and Galloway regional council. The fact that both COSLA and my regional council thought fit to raise the matter with me shows that it is perhaps not as insignificant as has been made out. In Dumfries and Galloway it will apparently make a difference of only 0·75p to the rate. That is not insignificant today, when we are trying to keep every ratepayer's bill down by every possible penny.
I want to ask my hon. Friend about the differential between Scotland and England in valuations and assessments. It seems to me that the assessor in Scotland almost invariably assesses buildings, caravans, race courses and so on, substantially higher than the equivalent in England. What discussions is my hon. Friend having with the assessor in Scotland on the determination of assessment in Scotland? My hon. Friend has received correspondence from both my hon. Friend the Member for Galloway (Mr. Lang) and myself about the approach of the assessor to the valuation of caravans in Scotland. The difference between assessments in Scotland and in England is similar to the point that we are discussing this evening. The assessments are much higher in Scotland. Race courses in Scotland pay swingeing rates compared to equivalent race courses in England. My hon. Friend must accept that that has a deleterious effect on a host of events in Scotland.
Is my hon. Friend having consultations with the assessors in Scotland on the important issues of tourism and industry? There is anxiety that the assessors in Scotland are taking a much more severe decision on values than those in England and that Scotland is thereby losing substantially.

Mr. Dennis Canavan: I agree with the hon. Member for Dumfries (Sir H. Monro) about the unfair rating disparities between Scotland and England. He mentioned caravans and race courses. Football clubs are also anxious about the great burden placed on them. The rates that they pay are out of all proportion to those paid by first division clubs in England, although some of the English stadiums are in much better condition than those of some of our premier division clubs.
I thank the Minister. I do not often do so. My colleagues in the Central region and I met the Minister, and the Bill has now been produced. Central regional


council and the district councils within the region, particularly Falkirk, were worried about the burden. There would have been a great burden on the ratepayers at a time when the local authorities were yet again suffering cuts in rate support grant and in other areas where they should have Government support.
There is an element of retrospection in the Bill and some hon. Members may have reservations about that. I do not. This is not the first time, and it will not be the last, that the House has passed retrospective legislation. When a Labour Government are returned we may need more retrospective legislation to undo the damage done by the wicked Tory Government. I hope that when we introduce the legislation no hon. Member present today, particularly the Minister, who will be speaking from the Opposition Benches, if he has a seat at all, will criticise the iniquities of retrospective legislation. In certain circumstances, it is good and justifiable. I thank the Minister not only for the reasonable Bill but for setting a useful precedent for a Labour Government.

Mr. Allan Stewart: I am pleased by the happy and unusual tone of the debate.
I thank hon. Members for welcoming the Bill. As the hon. Member for Glasgow, Garscadden (Mr. Dewar) said, other rating matters, particularly the derating of external plant and machinery, may not have such a unanimous welcome. My right hon. Friend will be introducing an order, which we shall debate.
My hon. Friend the Member for Dumfries (Sir H. Monro) said that the measure is not insignificant. It is technically complex and £40 million rate income is not insignificant. My hon. Friend and the hon. Member for West Stirlingshire (Mr. Canavan) mentioned the differences between rateable values in Scotland and those in England and Wales. The Bill is not related to that point, but I assure hon. Members that my right hon. Friend the Secretary of State is examining various cases that have been sent to us about caravans, race courses, football grounds and other matters. The valuation systems are different north and south of the border and always have been. Rateable burdens vary for several reasons, including the different expenditure patterns of different local authorities.
The House has welcomed the measure. It is technical but important. I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Cope.]

Bill immediately considered in Committee; reported, without amendment.

Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.

Bill accordingly read the Third time and passed.

Orders of the Day — Statutory Instruments, &c.

Mr. Deputy Speaker (Mr. Ernest Armstrong): To save the time of the House, I shall put together the Questions on the two motions to approve the statutory instruments—that is items 6 and 7 on the Order Paper.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A(5) (Standing Committees on Statutory Instruments, &amp;c.).

VETERINARY SURGEONS

That the draft Veterinary Surgeons Act 1966 (Schedule 3 Amendment) Order 1982, which was laid before this House on 24th November, be approved.—[Mr. Cope.]

ANIMALS

That the draft Welfare of Livestock (Prohibited Operations) Regulations 1982, which were laid before this House on 24th November, be approved.—[Mr. Cope.]

Question agreed to.

ANIMALS

Resolved,
That the proposed alterations to the Code No. 1 of the Codes of Recommendations for the Welfare of Livestock, relating to cattle, which were laid before this House on 24th November, be approved.—[Mr. Cope.]

Resolved,
That the proposed alterations to the Code No. 2 of the Codes of Recommendations for the Welfare of Livestock, relating to pigs, which were laid before this House on 24th November, be approved.—[Mr. Cope.]

Standing Orders (Revision)

Ordered,
That a Select Committee be appointed to consider and report upon the re-arrangement and re-drafting of the Standing Orders so as to bring them into conformity with existing practice.

Ordered,
That Mr. Allen Adams, Mr. George Cunningham, Mr. Robert Rhodes James, Mr. Robert Litherland, Mr. Nicholas Lyell, Mr. Robert Maxwell-Hyslop, Mr. Peter Thomas and Mr. Ken Weetch be Members of the Committee.

Ordered,
That the Committee have power to send for persons, papers and records.

Ordered,
That Three be the Quorum of the Committee.—[Mr. Cope.]

Orders of the Day — Domestic Energy Supplies (Standing Charges)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]

Mr. John Ward: I thank my hon. Friend the Minister, who has already had a busy day in his ministerial duties, for being present to answer the debate on standing charges for domestic energy supplies.
The debate is not intended to be a general attack on the suppliers of domestic energy. I shall concentrate on a specific subject—standing charges.
It is a strange coincidence that exactly one year ago tonight the South and West experienced some of the most appalling weather that they had had for many years. There was enormous damage to electricity supplies. I and many of my constituents remember the untiring efforts that were made in Arctic conditions to restore supplies to domestic users.
In the past year, local electricity authorities —certainly that in my area—have used their time wisely to improve means of delivery and communication with the public in time of emergency. They have also been imaginative in their use of local radio, which did such sterling service a year ago.
My constituency is predominantly urban and I am sure that my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), my hon. Friends the Members for Bournemouth, East (Mr. Atkinson) and Christchurch and Lymington (Mr. Adley) will confirm the general anxiety in areas similar to Poole. I understand that if my hon. Friend the Member for Dorset, North (Mr. Baker) catches the eye of the Chair, he will refer to the problem in rural areas, which are not dissimilar to ours.
The House will be aware that, apart from the cost of accommodation, domestic rates and fuel are among the largest items of expenditure in the householder's budget. Like many of my colleagues, I find that much of my mail consists of constituents' complaints about those two items. The Minister and I are unable to do anything tonight about domestic rates, which are the responsibility of my right hon. Friend the Secretary of State for the Environment, who I hope will be making a more welcome announcement in the near future. However, we can again outline the level of hardship that is caused by the standing charge element in domestic fuel bills.
I should also like to refer to the standing charge element in water bills. In some areas that charge is not excessive at present, but if we continue with the expansion of the use of meters we could well get complaints from consumers if the level of standing charges in the water industry are not watched.
I am well aware that the Government have already done much to help the elderly and the underprivileged with their fuel bills and that about £300 million has been made available in the current year for this purpose. Most people who complain to me about their fuel bills say that, although they economise in the use of fuel, standing charges are an increasing burden. In many instances, the standing charge exceeds the cost of the fuel consumed by a considerable amount.
A constituent who finds electric central heating too expensive to run recently wrote:

A couple of years ago we had a gas fire installed and the standing charge per quarter was £2·16. What logical reason can there be for increasing standing charges from £8·64 per annum to £36 per annum in two years?
That constituent was kind enough to include her gas bill, which showed that for the quarter concerned the bill for fuel was zero but the standing charge was £9. That shows maximum economy in the use of fuel, but the £9 standing charge per quarter still applied.
Another constituent wrote that she and her husband are living on a low wage and have had to economise. They did so by not having any heating during the day. She cooks by gas, but tells me that their self-denial is in vain, because as fast as she saves gas the standing charge is increased and up goes her bill.
It is regrettable that, when explanations are sought from gas offices, people are told that it is entirely because of the Government's revenue requirements that standing charges are increased. It would be fairer if the people in gas board showrooms explained to the customers concerned why standing charges are thought to be fair and necessary as part of the domestic energy costing system. They might also explain that domestic gas prices have risen over the last three years because the previous Government held down prices artificially.
It is not generally understood that the power to adjust standing charges rests not with the Secretary of State but directly with the gas and electricity industries. However, My right hon. Friend has asked those industries not to increase standing charges further until the results of two inquiries are known. The first inquiry is being carried out in co-operation with independent consultants, and is examining the level and composition of standing charges. I understand that this is the first time that an independent inquiry into standing charges has been carried out into any of the energy supply industries, and I also understand that the report is likely to be available by Christmas. My right hon. Friend the Secretary of State has asked the industries to re-examine the possibility of limiting standing charges to small consumers to not more than half the total bill. The measure has become known as the 50–50 proposal.
There has been much anxiety and some action has been taken about the level of standing charges but we are now approaching the period of heaviest fuel consumption. It is important that speedy decisions should he made if any action on standing charges is to be effective in the current season.
I do not call for the abolition of standing charges, because I know that they are fixed costs that are incurred by all domestic customers, no matter how much or how little fuel they use. I am also aware that the standing charges are intended to cover the costs in full and that, without standing charges, customers who must maintain a supply for standby purposes would pay nothing. If, as some of my right hon. and hon. Friends have suggested, standing charges were to be abolished, the unit costs of domestic fuel would have to be increased by about 15 per cent. That would be an intolerable burden on consumers.
However, if the 50–50 proposal were adopted, about 1 million gas consumers and ¾ million electricity consumers would benefit. About ½ million of those people would be pensioners. I accept that the Department of Health and Social Security is the only Department geared to help those in most need but the people of whom I am speaking are those not receiving direct help from the Government but those who are trying to live within their means. I am aware


that many of the heaviest domestic energy consumers are the elderly and those with young children and it would be wrong if, in trying to help one group by reducing standing charges, we further penalise those who are least able to pay their way. It is not only the less well-off consumers who must watch their pennies, but many who live on fixed incomes that are above the level at which they may receive State assistance.
As a result of media interest in this debate, it has been suggested to me that the 50–50 proposal could mean that heavy consumers of domestic energy will have their standing charges increased to compensate for any reduction for low energy consumers. One worried gentleman took the trouble to phone the House today because he believed that his standing charges could go up to £100, which would be equal to the cost of the fuel that he uses. I have never heard of such a proposal and I would expect that the cost of reducing standing charges for low energy consumers will be conpensated by a marginal increase in the unit rates.
A lady from Scotland phoned me this evening to say that if standing charges were lower she would have gas connected. Perhaps the gas boards would get more business if they reduced standing charges.
I have obtained some figures for the adjustment to the unit and therm rates that would be required to give effect to the 50–50 proposal—when the standing charges would not be greater than half the total bill. Based on October 1982 rates, the 50–50 proposal would increase the price per therm of domestic gas and the unit rate of electricity by small fractions of a penny. That does not seem too high a price to pay to remedy the sense of injustice and frustration felt by so many domestic consumers in trying to live within their means.
There is some good news from the gas and electricity industries. I understand that the average price of electricity will not increase in April 1983. That will help to alleviate some of the problems that I have illustrated. It would also seem that the next review of gas prices will not take place until October 1983. I hope that the breathing space will be used to examine closely the standing charges problem.
Those who oppose a reduction of standing charges to 50 per cent. of the fuel bill sometimes mention second home owners and others who might be considered to benefit unfairly from such a system. Often, when measures are taken to improve the financial circumstances of those most in need, others may also benefit. I accept that, but I feel strongly that it should not be an excuse for failing to act.
While, as I have illustrated, the Government have done much to help and have exerted pressure on both the gas and electricity industries—especially through the two inquiries that I have mentioned—any progress that is being made is much too leisurely. If the two industries did not enjoy an effective monopoly and were in a competitive market, they would be much more responsive to public concern. It is unacceptable that their monopoly position allows them to dictate progress in this matter.
Hon. Members should not underestimate the anger, frustration and resentment of those who are trying to plan their spending and whose efforts are frustrated by the high standing charges. I hope that my hon. Friend the Under-Secretary of State will say tonight that further pressure is being put on the two industries rapidly to bring to a

conclusion the two investigations set up by my right hon. Friend the Secretary of State, and that during the next few weeks—no later—we shall hear that some action is being taken to help those who find that, despite all their good housekeeping, their fuel bills are increased to unreason-able levels. The effect of standing charges, when related to the domestic consumption of low energy consumers, is ridiculous. Once again, I thank my hon. Friend the Under-Secretary for being here to answer this debate and I look forward to his reply.

Mr. Frank Haynes: The Under-Secretary of State should listen carefully to what is said tonight, bearing in mind the real pressure that is put on Members of Parliament by their constituents. In my surgeries, and when I go around my constituency, I hear complaints from, in particular, the elderly, the low income groups and the unemployed. The worst hit are those who earn above a certain income and who cannot claim benefit, yet who must meet their energy debts. There is real public concern about the matter.
The hon. Member for Poole (Mr. Ward) referred to price increases during the past few years, but we must consider the present position. Prices could have been kept down either by reducing the standing charge or by halting the price increases encouraged by the Government. The increases cause misery and poverty, but tonight we are talking not about energy price increases but about standing charges, which are a racket for the public industries. We may have had those charges when the Labour Party was in power, but matters have become much worse during the past three and a half years. Statistics prove that to be so.
The press in Nottinghamshire, which supports the Conservative Party, has run a campaign about standing charges for several weeks. It is a beautiful campaign, and I am told in no uncertain terms that many representations have been received from the people who have been hit especially hard by standing charges.
Hon. Members know what happens. Constituents come to surgeries and say "This charge has risen again", and so it continues. The hon. Member for Poole referred to £100. The way that we are going now, it will not be long before we reach that figure. However, it would appear that Ministers have applied pressure to the nationalised industries to hold down their prices in preparation for a general election. I noted that the hon. Member for Morecambe and Lonsdale (Mr. Lennox-Boyd) was nodding in agreement with me until I mentioned the general election.
The Minister and his colleagues have a real responsibility. I do not wish to hear the Minister say tonight "I cannot interfere". The Secretary of State interfered when he wanted the prices jacked up by 10 per cent. above the inflation rate for three years. I hope that the Minister will say tonight that he will do something about standing charges.
I welcome the opportunity to participate in the debate and to congratulate the hon. Member for Poole on initiating it. I shall take great interest in what is said from the Conservative Benches on the subject of standing charges. I recognise that many hon. Members on each side of the House are greatly concerned about standing charges. I hope that the Department, and the Minister in particular,


will take note of that feeling, because many representa-tions have been made to hon. Members in the hope that the Government would do something about it.
It is no good having a couple of inquiries and then doing nothing. Those who are hit particularly hard by the standing charges would like to see them abolished. Many hon. Members have suggested that in all sorts of places, including this Chamber, and note should be taken of those suggestions.
The various energy boards are making millions of pounds of profit. How are those profits being spent? That is another question, but the fact that such huge profits are being made gives the Government an opportunity to do something about the massive standing charges. It is high time that something was done about them. It would be a feather in the Government's cap if they were to do something, with a general election looming on the horizon.
I have tried hard not to make political comments, because I feel very strongly on the question, as do other hon. Members. Clearly the Government have a responsibility to do something about standing charges. They can do something, and I hope they will.

Mr. Jim Lester: I am delighted to be able to support my hon. Friend the Member for Poole (Mr. Ward) in his most reasonable case, and also to support the hon. Member for Ashfield (Mr. Haynes) in some of his remarks, although not all of them, because he raised rather wider issues than that of standing charges for domestic energy. He and I represent areas which have a great deal to do with the energy industries. We supply the coal for the Trent valley, which supplies the power to the grid for much of the national economy, far beyond our local needs, so we shall always take a particular interest in energy.
The argument relates to the acceptability of the basis on which standing charges are calculated and to an understanding of the principle involved. Those who pay the standing charges, and particularly those who feel most strongly about the matter, are not fools. They are people who have experience of making ends meet over many years. They are not simple people. They understand the basis of bills and the basis of meeting their weekly payments. The principle of minimum use of energy is a proper one for a declining resource, and they understand that principle, but they cannot equate it with the imposition of standing charges which go up at a faster rate than the rate of inflation. That is what causes friction and difficulty.
It is easy to understand the basis of the energy industries' interest in standing charges. They say that there is a basic infrastructure that has to be provided and that that infrastructure has to be divided between the consumers on an equal basis, but that policy does not work in practice for those who are paying the bills.
I should have thought that it would pay the energy industries—it does not matter which facility, and I include water and would go so far as to include petrol—to look at how much worry, concern and public aggravation there is about the basis on which they levy charges. It cannot be worth their while to go further down that route.
My hon. Friend the Member for Ashfield—I call him my hon. Friend because I have known him for a long time—said that our local paper conducted a campaign on this matter and encouraged letters from constituents. The

case has been widely expressed. I cannot underestimate the public concern, whether it is in Poole, Nottingham or Scotland. Wherever one goes the concern is similar.
I shall not go as far as to suggest a solution, but I believe in the principle that the cost of energy should be related to the cost per unit, whether the facility is water, electricity, gas or petrol. There is a basic justice in that formula.
We accept that the energy industries must charge a basic minimum. The simplest method, which people could understand, would be a basic cost per unit and a minimum charge. That charge should be well publicised on the bottom of the bill. It should state that below a certain level it is not economic to supply the fuel, whatever it is, and so there has to be a minimum charge. People could understand that. It is based on justice. It is linked to usage. There should be an understanding that there is a minimum charge below which it is not worth while to supply that facility.
If we could move in that direction, there would be much less concern and aggravation and more support for the work done by the energy industries. One should not criticise them too much. There have been tremendous changes in all the industries. They have coped with enormous difficulties, particularly the gas industry when it converted town gas to North Sea gas. One does not want to condemn the industries. A proper basis of charging, which is simple, straightforward and understandable, and which my hon. Friend the Member for Poole has called for, as I do, would be better for everyone, particularly for consumers who feel that they are unjustly treated.

The Under-Secretary of State for Energy (Mr. David Mellor): I am glad that circumstances have allowed us to have a longer debate on this important topic than would have been possible under normal circumstances when the Adjournment debate has to be compressed into the last half hour of the day's sitting.
I join in the congratulations that have been extended to my hon. Friend the Member for Poole (Mr. Ward) on having raised this important subject. Having lived with the issue of standing charges for almost a year almost on a daily basis, I am glad to have an opportunity to speak at greater length than is possible at Question Time about some of the difficulties, which I know many hon. Members would wish me to do, and to make some points about the action that the Government have taken, which is, in my respectful submission, considerable.
I look kindly upon my hon. Friend, not merely because of his many sterling qualities but because he represents the borough of Poole. I was born within a few miles of his constituency. I did not have the privilege to be born within it, but Poole was our nearest big town. For nearly 20 years it was one of the centres of my life. I like Poole. My hon. Friend serves it well as its Member of Parliament.
As the Minister responsible for electricity matters, I should also like to thank my hon. Friend for his gracious tribute to the efforts of the Southern Electricity Board, which covers his constituency, in coping with the enormous problems that were posed by the extreme weather of last winter. I know that many consumers were distressed at losing power last winter. One cannot imagine any more distressing occurrence to disrupt normal family life than the loss of electricity, such is our dependence on this basic commodity. It is equally right, as my hon.
Friend made clear, that strenuous efforts were made by men who worked in conditions that none of us would like to experience to restore the supply.
I was in the south-west of England two weeks ago as a guest of the South Western Electricity Board. I had the opportunity to see work being carried out on Dartmoor to replace some poles that had had their day and to strengthen the system in preparation for the winter. I did not care to spend too long even in the fairly mild conditions that were then prevailing. The thought of spending two or three hours at a time on top of a pole and working in those conditions is not pleasant. At a time when it is sometimes suggested that attitudes have polarised on nationalised industries—the saying goes that one is either very much in favour of them or very much against them—it is important to know that my hon. Friends share my conviction that in these technical matters we are well served by those who work for the electricity industry.
My hon. Friend pursued his case with clarity and moderation. He recognised, as did the hon. Member for Ashfield (Mr. Haynes) and my hon. Friend the Member for Beeston (Mr. Lestor), the importance that is attached to the issue by so many of our constituents. As the representative of a socially mixed inner London constituency, I am only too aware of that. My hon. Friend was prepared to recognise—I thank him for it, he having studied the subject with much greater care than some who have dilated upon the matter on other occasions—the seriousness with which the Government take the issue and many of the complexities which lie in the way of the easy solutions that are so often peddled.
I am aware of the wide interest on both sides of the House. Thankfully, it is an interest that transcends party lines and discussion upon it does not degenerate into party squabbling. It cannot be a partisan issue. Standing charges have been around for a long time. It was the hon. Member for Bristol, North-East (Mr. Palmer), who worked for a number of years in the electricity supply industry, who reminded me that standing charges for electricity date back to the 1880s. Consequently, they have been around for nearly a century. We know that they have been a subject of concern for several years.
In 1976 the then Government asked an interdepartmental group of officials to review the scope for helping poor consumers by adjusting the structure of energy tariffs, or by other means such as introducing special concessionary tariffs or free allowances of gas and electricity. The future of the standing charge was at the heart of the 1976 study. The then Government produced a carefully argued document entitled "Energy Tariffs and the Poor", which set out the consequence of making tariff changes, some of which would have had the effect of abolishing the standing charge. That is at the heart of the present political debate.
The interdepartmental group considered four options. The first option was a flat rate, which I suspect is favoured by my hon. Friend the Member for Beeston, but I want further to consider what he said about unit charges. A flat rate would not be so dissimilar from what he was proposing. He advocated that consumers should pay for what they consume unit by unit with no extras, just as we pay for a pound of apples at the greengrocer's shop or for a pint of beer in a pub.
The second option was to halve the standing charge and to put the extra revenue that would come from the standing charge at its full level on to the unit charge.
The third option considered by the 1976 group was a two-tier inverted tariff whereby there was a cheaper rate for the first units consumed, and then a higher rate after one crossed the particular threshold from the cheaper rate to the higher rate.
The fourth option was an idea that initially came from Japan, and which is of oriental complexity. It is a three-tier inverted tariff whereby instead of a standing charge there would be a lower rate for the first few units of consumption that would be set about 10 per cent. below the norm. The norm would be a middle range achieved after one had consumed the requisite number in the lower first rate. Having passed through that second rate of tariff, one would come, if one were a large consumer, to a third rate set at a level sufficiently above the norm to yield in overall terms the same income as would have been yielded from the previous existing tariff—in other words, to make up the shortfall for the first initial tranche of units being sold at a discount.
Those four ingenious alternatives to the present system were examined and the consequences of imposing those tariffs were examined in relation to different categories of consumers, particularly those consumers about whom we are all most exercised—poor consumers. It showed that some consumers would benefit from each of those changes in tariff as against the existing system. It also showed that in each and every case many consumers would be worse off if the different tariffs were applied. Sadly for the purposes of making progress, those who would suffer a detriment as a result of any one of those changes would include just as many poor people. Indeed, it would include many people who were as poor if not poorer than those who were in the categories that would benefit.
That came about first because of the one crucial stumbling block to an easy solution to the problem, which is the simple proposition, which I fear is wholly true, that poor consumers are not necessarily small consumers. That means that action that is designed to assist small consumers does not necessarily assist poor consumers as a whole if the consequences are to impose detriments on those who are larger consumers.
That leads me to the second crucial stumbling block to an easy solution found by the 1976 group, which is that because of the industry's financial position, then and now, any shortfall in revenue resulting from giving concessions to one group has to be made good from the rest. That led the interdepartmental group to say in paragraph 8 of the report:
We are satisfied that there is a sound case in economic principle for a tariff structure under which standing charges are maintained separate from the unit consumption charge. Though costing cannot be exact the industries' tariffs aim to charge customers what it costs to supply them. This is the appropriate way for the industries to comply with the obligation, which rests on each of them under their governing statutes, not to discriminate or show undue preference as between classes of consumer and individuals.
That is nothing more nor less than a defence of the principle of standing charges. The overall document, which is an impressive and cogently argued one, won the full-hearted commendation of the then Secretary of State for Energy, the right hon. Member for Bristol, South-East (Mr. Benn), who said in his signed foreword to the document:


After considering the group's report, the Government have concluded that none of these possibilities offers a satisfactory way of helping poor consumers with their fuel bills.
Thus, standing charges survived the 1976 review.
The Government have had to take up the torch this year following the clear indications from the public and from hon. Members on both sides of the House that it is time to examine this matter afresh because of the extent of public concern about standing charges. In reconsidering the evidence, we have taken account of the views of a large number of colleagues and a large number of groups outside Parliament. This has been a wholly fresh look at the matters examined in 1976 which has taken us into detailed consideration of tariffs not just for electricity, as was done in 1976, but also for gas.
Our initial aim was to see whether the conclusions reached by the interdepartmental working party in 1976 and endorsed by the then Government through their Secretary of State, the right hon. Member for Bristol, South-East, were robust against today's tariff levels, today's standing charge levels and the overall circumstances prevailing.
Our examination is not completed because, having done the initial work of breaking the ground and reaching the sad conclusion that on the figures the balance of advantage and detriment applying the various alternative tariff proposals remains much as it was found to be in 1976, we thought that on this occasion we had to go further, that it was not sufficient to confine the matter wholly to Whitehall and nor was it sufficient on this occasion to leave the matter where it was without asking for some action from the industries on the way in which standing charges were applied to all their consumers.
We took two new initiatives. For the first time, with the full agreement of the industries, the principles of the standard charge are being subjected to independent analysis by accountants and management consultants from the City of London. Never before has there been such an examination by people outside the Government and the public sector. We asked for their report to be concluded speedily, and we expect it to be available shortly. As my right hon. Friend the Secretary of State said earlier today, the results of their examination will be published in the new year. What they have to say will be of fundamental importance in determining what the industries should do about standing charges.
What we are concerned to know is not merely whether standing charges are fair in principle—whether they reflect, as the 1976 group concluded that they did, a valid distinction between two different categories of cost—but also whether the level of standing charges, whatever the case may be on the principle, is proper and not merely a convenient mechanism for passing on inflated costs to the consumer.
The auditors have been asked to satisfy themselves that the level of standing charges properly reflects fixed costs, that the charges imposed on customers are as equitable as can be reasonably hoped, and that the costs are not exaggerated by inefficiency in the industries.
I am happy to say that this proposal for a wholly independent audit has been welcomed in the House and, if my right hon. Friend's mail bag is anything to go by, by groups outside as well.
Our second initiative is to make a specific proposal to the industries that standing charges be limited to not more than 50 per cent. of any bill to help small consumers. To

put at rest the mind of the gentleman who contacted my hon. Friend, I can say that there is no counterbalancing proposal that, where the unit charge is higher than the standing charge, the standing charge should be raised to that same level. That would be an iniquitous proposal. I assure him that that plays no part in what we have suggested.
This measure is designed to relieve the industries and Members of Parliament of quite the most painful cases that come to our notice at advice centres such as I hold in my constituency. Quite often I meet a pensioner with a gas bill of perhaps £11 for a quarter, of which £9 is the standing charge.

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]

Mr. Mellor: It worries me and other colleagues when pensioners present themselves in such circumstances. The effect of what we have proposed to the industries would be that the standing charge for small consumers would be pulled down to the same level as the unit charge. In the oft-quoted case of the pensioner for whom the unit charge is only £1 or £2 a quarter—as it might well be in a summer quarter—the bill would be dramatically reduced.
We made our request because we recognise the resentment felt by some small consumers, particularly the elderly, when standing charges comprise the bulk of their bills. We have asked the industries to calculate how many people would benefit from our proposal. They estimate that about 1 million gas consumers would benefit and perhaps as many as 2 million electricity consumers, and that about half would be pensioners.
It is fair to say that not all beneficiaries would be poor. Some, for example, would be second home owners in good circumstances, who merely have a supply which they do not use much. I acknowledge that, but in defence of our proposal I should point out that a recent study by researchers at the University of York showed that the benefit is tilted towards the poorer off, in that a greater proportion of beneficiaries of such a scheme are poorer off than the proportion of poor people in the community as a whole. Also in defence of our proposal, and the suggestion that some undeserving people will benefit, I should point out that no change in tariff can be targeted precisely only at the poor. As I have already said, consumption levels are not related to means.
We believe, however, that the industries should accept our suggestion. Not to do so would, as my hon. Friend the Member for Poole made abundantly clear, fly in the face of public opinion and in the face of sincerely held opinion in many parts of this House. In our opinion this measure is needed and should and commend itself to the industries as a way of retaining public confidence in their operations and as a means of improving consumer relations. Indeed, knowing the extent of the worry felt by small consumers in this connection, I cannot help feeling that had the industries been in the competitive sector they would have had to respond to public criticism by introducing such a measure long ago.
As I have the opportunity to dilate in more detail than is usual on these occasions, perhaps I should say a word about the cost. It has been quantified at about £16 million for electricity and about £20 million for gas. Those are small amounts in the context of a total turnover of £8


billion in the electricity supply industry and more than £5 billion for the gas industry. If the industries accede to our request, we hope that those sums can be swallowed up by greater operating efficiencies. However, there could be a small impact of perhaps 2p or 3p a week on the bills of other consumers. I acknowledge that, but it is unavoidable, because such are the delicate economics of the industries that any concession has to be paid for by other consumers. Neither the industries nor the Government can flout the laws of mathematics in that regard. That was clearly understood and underlay the study in 1976 and has, equally as clearly, for the same reasons, underpinned the consideration that we have been giving to these matters this year.
I want to explain a matter that has caused some concern in the debate and which was raised, in particular, by the hon. Member for Ashfield. I have made it clear that we have asked the industries to accept our proposal. We have no legal power to direct them to do it because ever since those industries were set up 35 years ago in their present nationalised form, tariffs have clearly fallen within the day-to-day management responsibilities of the industries, and those, by statute, are exclusively a matter for the industries and not for the Government.
It must be clearly understood that the Government have no legal power to compel the industries to take a different view, just as the derivation of the standing charge has nothing to do with either the will of this or previous Governments. It is a matter for the industries to consider the best way to carry out their obligations fairly under the statute. As the 1976 report made clear, they must not show undue preference between one class of consumer and another. However, the Government are entitled to tender advice to the industries on matters of public concern and that is why we have made the proposal that we have.

Mr. Edward Rowlands: Has the hon. Gentleman any reason to think that the industries will not accept his advice?

Mr. Mellor: I hope that they will accept the advice. They are presently considering it and would prefer to await the outcome of the auditor's report before accepting it.

Mr. Rowlands: That will be a long time ahead.

Mr. Mellor: We are expecting the auditor's report literally within the next two weeks and hope to be able to make the results available in the new year.
I hope that the industries will accept our advice. They have not said that they will and I cannot anticipate that. However, I think that I would be right in saying that it would be the mood, certainly of those hon. Members present tonight, that they should do so.
As I have made clear, final decisions on the future level of the standing charge and other issues will have to await the outcome of the auditor's report. I do not want to build up false hopes about the complete abolition of standing charges, nor the abolition of standing charges for a particular category of consumers, for example, pensioners. There is a case for a standing charge of some kind. No one can deny that the industries incur some costs in supplying consumers, whatever their consumption. The industries must lay on and maintain a distribution system to each home and supply a meter to monitor supply. Those

and other costs are prima facie independent of consumption and it is impossible to deny their existence. I say again that that was the conclusion in 1976 and those basic underlying circumstances have not changed today.
The problem that lies in the way of abolishing the standing charge is by no means exclusively based on the fact that there is a rationale for differentiating between costs of supply and consumption. The real problem that lies in the way of its abolition is that standing charges raise about £500 million for each of the two supply industries. Just as the Labour Government did in 1976, we must work on the basis that that shortfall would have to be made good by increases in other parts of the tariff. As my hon. Friend the Member for Poole has made clear, the consequence to the industries of abolishing the standing charge—which some hon. Members have asked for, but not, I know, my hon. Friend the Member for Poole—would be an increase in the unit rate of around 15 per cent. for each industry. The effect of that needs to be most seriously considered by any who advocate such a course. With the assistance of the industries, we have estimated that abolishing the standard charge would increase the bills of about 40 per cent. of all electricity and gas consumers.

Mr. Haynes: The Minister said that the proposal would cost £500 million. He made no reference to the massive profits that the energy industries are making. Has he taken them into account?

Mr. Mellor: Such massive profits do not exist in reality. The electricity supply industry, with its turnover in excess of £8 billion, barely breaks even in the view of even the kindest of accountants. When interest is taken into account, it makes a loss. The profit, after tax, by the gas industry in the last financial year was £144 million. That represents a return on assets of 1·4 per cent. That is a decline from the position in 1978–79, when it made a profit of £172 million, or a 2·4 per cent return on assets. That profit of £144 million is not much in the context of a capital investment programme to secure gas supplies and their efficient distribution in the next few years.
The hon. Member for Merthyr Tydfil (Mr. Rowlands) asked about the gas levy, which merely reproduces for the old gas contracts the impact of the petroleum revenue tax imposed by the Administration of which he was a member, on oil and newer gas contracts. It is neutral in relation to profits. The levy is a way of removing windfall profits from a sector which was arbitrarily left out in the decision by the Labour Government to impose petrol revenue tax on the rest of North Sea activities, including new gas contracts.

Mr. Rowlands: Do the figures include the new gas levy?

Mr. Mellor: The figures relate to the position after the gas levy has been taken into account. It is not relevant to profitability. The debate is not partisan, and I want hon. Members to recognise that the obstacle to abolishing the standing charge is the impact that it would have on some consumers. All consumers are not necessarily small consumers, and there could be an adverse effect on many poor families. According to our detailed examination, abolishing the standing charge could make some families in extreme circumstances worse off by several pounds a week.

Mr. Nicholas Baker: I apologise for not being here earlier, Like my hon. Friend the Member


for Poole (Mr. Ward), I have received many representations about standing charges. They have all been about the standing charges being inflexible and sometimes amounting to more than the cost of the energy consumed. No one has said to me that standing charges should be abolished. Consumers want them to be graded and more flexible, because they create hardship for many elderly and poor people.

Mr. Mellor: I am glad that my hon. Friend, another representative from the county of my birth, should say something with which I agree. His point endorses the Government's view that if the industries accepted our proposals that would do a great deal to satisfy the anger of many who are worried about the plight of small consumers.
I shall give a few more details about the impact of the abolition of standing charges. I appreciate that only one hon. Member participating in the debate has advocated that policy. However, it finds a place in the contributions of a number of hon. Members at Question Time. The subject is often raised in public debate and this is an opportunity for the Government to make clear why it is not such an easy proposition to accept as some might imagine.
We have estimated that, among the 40 per cent. of gas and electricity consumers whose bills would have to increase if the income yielded from the standing charge had to go on the unit charge, there would be about one million households with pensioners at their head. About 350,000 of that 1 million pensioner households would be poor. We estimate also that among those whose bills would be increased would be about half a million households with incomes up to or around supplementary benefit level.
Anyone who used more than 200 therms of gas a quarter would need to pay more. That amount of gas is not very much. It would cover family hot water from a multi-point plus a gas cooker in fairly regular use, plus a gas fire for about six hours' use a day. One is dealing with the average family. If one expressed 200 therms in another way they would cover a single large gas fire on for 11 hours of the day, which might cover the circumstances of a number of single people as well. We estimate that nearly 30 per cent. of pensioners on gas would lose from that proposal.
With regard to electricity, anyone using more than 900 kilowatt hours a quarter would lose and end up paying more if standing charges were abolished. That is the equivalent to a family using a normal electric light and refrigerator plus eight hours a day with a single-bar electric fire. One is not talking about a number of washing machines, hi-fi, and equipment of that kind before that barrier is crossed. We estimate that that barrier is crossed so easily that about 30 per cent. of pensioners using

electricity would lose. No one should advocate the abolition of standing charges without the most careful thought. Removing standing charges altogether would cause hardship to many.
I shall discuss the proposal for the abolition of standing charges for pensioners. There are 1,500,000 pensioners benefiting materially already from the DHSS heating allowance, which is now set at about £300 million for the coming winter. The cost of abolishing standing charges for pensioners would be a further £300 million and it has to be asked whether that would represent good value for money. I understand that that proposal will win an easy round of applause at public meetings where there are a number of elderly people present. However, is it a proper way to spend public money?
I suggest that there are a number of reasons why that proposal has to be looked at with great caution. First, the distribution of benefit would be inequitable and unrelated to need. Secondly, the quantity of assistance would depend arbitrarily on which fuel the household uses. Thirdly, no benefit would go to those people who are not registered consumers. That would include many pensioners in rented accommodation. This is a selective list. There are other compelling reasons against the proposal. Of the principal reasons, the fourth would be that it would lead to a significant increase in the bills of other consumers including many who may not be pensioners but who are probably worse off than many pensioners.
The Government are committed to doing all they can for pensioners within available resources. Our record bears comparison with that of any of our predecessors. It is vital, and successive Governments have said this, that help should be given in the most effective way possible. The Government's review of the issue has, as I hope the past half hour may have helped to establish, been as thorough as we can make it.
Our work has established that tariff juggling is not the answer. The previous Government also reached that conclusion. Final judgment on the level of standing charges must await the outcome of the auditor's report, which we expect shortly. The independent evidence that the report will provide will be invaluable in helping industries to reach conclusions on tariff policies which are based on objective analysis and which, I hope, will command the confidence of all consumers.
The Government will continue to play a helpful role as the protector of the public interest in assessing the evidence and, where necessary, making our views clearly known to the industries, the House and the country.

Question put and agreed to.

Adjourned accordingly at twenty minutes past Ten o'clock.